ABSTRACT We examine institutional blockholders’ active monitoring influence using a proprietary corporate governance score (CGS) provided by the Korea Corporate Governance Service (KCGS). We find that institutional blockholders effectively exert monitoring influence to improve CSG scores of investee firms. The evidence of effective monitoring is particularly evident for domestic institutional blockholders and is strongest in the shareholder rights category of the CSG score. Consistent with domestic blockholders having an informational advantage over their foreign counterparts, the evidence of active monitoring is stronger (weaker) in firms with lower (higher) earnings management (higher information quality) and for firms with lower (higher) stock liquidity. Our robust findings shed light on the specific monitoring role of institutional blockholders in emerging markets, where sound corporate governance is essential to firms’ long-term sustainability.

中文翻译：

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地理邻近在主动监控中是否重要？来自韩国市场公司治理机构大股东监督的证据

摘要 我们使用韩国公司治理服务 (KCGS) 提供的专有公司治理评分 (CGS) 来检查机构大股东的主动监督影响。我们发现机构大股东有效地发挥监督影响力来提高被投资公司的 CSG 分数。有效监督的证据对国内机构大股东尤为明显，在 CSG 评分的股东权利类别中最为明显。与国内大股东相比外国同行具有信息优势的情况一致，在盈余管理较低（较高）（信息质量较高）的公司和股票流动性较低（较高）的公司中，主动监控的证据更强（更弱）。