Work

Large Shareholders and Corporate Policies

Year: 2008

Type: article

Abstract: We analyze the effects of heterogeneity across large shareholders, using a new blockholder-firm panel dataset in which we can track all unique blockholders among large public firms in the United States. We find statistically significant and economically important blockholder fixed effects in investment, financial, and executive compensation policies. We also find blockholder fixed effects in firm performance measures, and differences in corporate policies are systematically related to differences in firm performance. We study potential sources of the heterogeneity and find that blockholders with a larger block size, board membership, direct management involvement, or with a single decision maker are associated with larger effects on corporate policies and firm performance.

Source: Review of Financial Studies

DOI: 10.1093/rfs/hhn093

Authors: Henrik Cronqvist, Rüdiger Fahlenbrach

Institutions: University of Miami, École Polytechnique Fédérale de Lausanne, Swiss Finance Institute

Language: English

Topic: Corporate Finance and Governance

Subfield: Finance

Field: Economics, Econometrics and Finance

Domain: Social Sciences

Open Access status: green

OpenAlex ID: W2172187031

FWCI: 27.55

Cites: 62

Cited by: 433

Related to: 10