Institutional investors boost firm performance in early years post-IPO.
The study looked at how institutional investors affect a company's performance after it goes public. They found that in the first year after the company goes public, institutional investors own more and more of the company's shares, which is good for the company's performance. However, this positive effect starts to fade in the third year after the company goes public. Overall, having more institutional investors in the early years of a company going public is a sign that the company will perform well.