Abstract

http://ssrn.com/abstract=1422416
 
 

Citations



 


 



The 'Wall Street Walk' and Shareholder Activism: Exit as a Form of Voice


Anat R. Admati


Stanford Graduate School of Business

Paul C. Pfleiderer


Stanford Graduate School of Business

July 2009

The Review of Financial Studies, Vol. 22, Issue 7, pp. 2445-2485, 2009

Abstract:     
We examine whether a large shareholder can alleviate conflicts of interest between managers and shareholders through the credible threat of exit on the basis of private information. In our model, the threat of exit often reduces agency costs, but additional private information need not enhance the effectiveness of the mechanism. Moreover, the threat of exit can produce quite different effects depending on whether the agency problem involves desirable or undesirable actions from shareholders' perspective. Our results are consistent with empirical findings on the interaction between managers and minority large shareholders and have further empirical implications.

Keywords: D53, D82, G10, G30, G34

Accepted Paper Series





Not Available For Download

Date posted: June 22, 2009  

Suggested Citation

Admati, Anat R. and Pfleiderer, Paul C., The 'Wall Street Walk' and Shareholder Activism: Exit as a Form of Voice (July 2009). The Review of Financial Studies, Vol. 22, Issue 7, pp. 2445-2485, 2009. Available at SSRN: http://ssrn.com/abstract=1422416 or http://dx.doi.org/hhp037

Contact Information

Anat R. Admati (Contact Author)
Stanford Graduate School of Business ( email )
518 Memorial Way
Stanford, CA 94305-5015
United States
650-723-4987 (Phone)
650-725-6152 (Fax)

Paul C. Pfleiderer
Stanford Graduate School of Business ( email )
518 Memorial Way
Stanford, CA 94305-5015
United States
650-723-4495 (Phone)
650-725-7979 (Fax)

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