*Associate Professor of Accounting, Department of Accounting, Shiraz University, Iran
**M.A. Student of Accounting, Department of Accounting, Shiraz University, Iran
Online published on 13 May, 2015.
In the studies, there is a duality relationship between institutional ownership and firm performance. While some studies have examined the effects of institutional ownership on corporate firm performance, other studies have examined the effects of corporate firm performance on institutional ownership. Reviewing the evidence of the validity of both approaches mentioned above, can mean that there is a bilateral (two-sided) relationship between these two variables. In this regard, the goal of present research is to study the bilateral relationship between institutional ownership and corporate firm performance in 119 listed companies of Tehran Stock Exchange (TSE) during 2003 to 2011. At first, the bilateral relationship between the two variables was confirmed with granger causality test and then simultaneous equations system was estimated using two-step regression. Analysis results express that there is bilateral relationship between corporate firm performance of listed companies of TSE. In other words, the results of the simultaneous equation system have more reliability and validity than single-equation.
Institutional Ownership, Firm Performance, Simultaneous Equations System, Tehran Stock Exchange
