The purpose of this paper is to examine the relationship between three major institutional holdings and firm capital structures on the Taiwan stock market, thereby exploring whether institutional holdings can influence capital structures. The results show that among three institutional investors, foreign institutional holding can affect the firm's capital structure most. As the foreign institutional holding increases, the leverage ratio decreases. Conversely, domestic institutional holding positively affects the firm's capital structure, especially for the Investment and Trust. In existing literature, there are few studies about this topic yet; therefore, this study can shed new light on the association between institutional holding, particularly for foreign institutions, and the firm's capital structure. We also realize that different institutional investors may prefer different firm characteristics. Moreover, this study presents that how institutional investors can affect a firm's capital structure through the market mechanism.
英文關鍵字
Institutional Holding, Three Major Institutional Investors, Capital Structure
