- List of Figures
- List of Tables
- Global Finance And Its Institutional Spaces
- Politics And Financial Markets
- Finance And Institutional Investors
- Business Groups And Financial Markets As Emergent Phenomena
- Central Banking And The Triumph Of Technical Rationality
- What is a financial market? Global markets as microinstitutional and post-traditional social forms
- Auctions And Finance
- Interactions And Decisions In Trading
- Traders And Market Morality
- The Material Sociology Of Arbitrage
- Seeing Through The Eyes Of Others: Dissonance Within And Across Trading Rooms
- Market Efficiency: A Sociological Perspective
- Financial Analysts
- Rating Agencies
- Accounting And Finance
- The International Monetary Regime And Domestic Political Economy: The Origin Of The Global Financial Crisis
- A Long Strange Trip: The State And Mortgage Securitization, 1968–2010
- Dead Pledges: Mortgaging Time And Space
- Financial Crises As Symbols And Rituals
- The Sociology Of Financial Fraud
- The Disunity Of Finance: Alternative Practices To Western Finance
- Islamic Banking And Finance: Alternative Or Façade?
- Geographies Of Finance: The State-Enterprise Clusters Of China
- The Financialization Of Art
- Historical Sociology Of Modern Finance
- Gender And Finance
- The Role Of Confidence In Finance
- Finance In Modern Economic Thought
- Financial Automation, Past, Present, And Future
Abstract and Keywords
Institutional investors have come to play a central role in financial markets since the early 1970s. They controlled about three out of ten shares of Fortune 500 companies in 1970. Today they control seven out of ten. The aging of the baby boom generation, coupled with new fiduciary requirements for defined benefit pension plans, contributed to this change. Agency theory offered a litany of innovations designed to ensure that executives pursued the interests of shareholders, rather than feathering their own nests. Institutional investors promoted the theory with a vengeance, encouraging firms through shareholder proposals and private bidding to put its prescriptions into place. This article examines the role of institutional investors in promoting changes in corporate management under the banner of shareholder value. It reviews evidence that these changes did little to promote share value and that they resulted in several disadvantages for the American worker-owner.
Jiwook Jung is a PhD candidate in the Department of Sociology at Harvard University. His research interests include organizational and economic sociology and the sociology of financial markets. His dissertation explores how increased pressure from financial markets has reshaped the behavior of firms, focusing on workforce downsizings by large American corporations between 1981 and 2006.
Frank Dobbin is Professor of Sociology at Harvard. His Forging Industrial Policy: The United States, Britain, and France in the Railway Age (1994) traces the roots of contemporary industrial policy approaches to the institutional logics of political order in different countries. The New Economic Sociology: An Anthology (2004), ties modern economic sociology to classical sociological theory. Inventing Equal Opportunity (2010) explores how corporate human resources professionals managed to define what discrimination meant under the Civil Rights Act.
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