Large Shareholders and Corporate Policies

We analyze the effects of heterogeneity across large shareholders, using a new blockholderfirm 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 investme...

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Bibliographic Details
Published in:The Review of financial studies 2009-10, Vol.22 (10), p.3941-3976
Main Authors: Cronqvist, Henrik, Fahlenbrach, Rüdiger
Format: Article
Language:English
Subjects:
Big business
Business structures
Corporate finance
Corporate governance
Corporate investments
Corporate management
Corporate policies
Datasets
Executive compensation
Financial investments
Financial management
Impact analysis
Investment policy
Investors
Large enterprises
Mutual funds
Ownership and control
Shareholders
Stockholders
Studies
U.S.A
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Summary:We analyze the effects of heterogeneity across large shareholders, using a new blockholderfirm 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.
ISSN:0893-9454
1465-7368
DOI:10.1093/rfs/hhn093