Large Shareholders and Corporate Policies

Posted: 28 Sep 2009

See all articles by Henrik Cronqvist

Henrik Cronqvist

Chapman University - The George L. Argyros College of Business and Economics

Rüdiger Fahlenbrach

École Polytechnique Fédérale de Lausanne; Swiss Finance Institute; European Corporate Governance Institute (ECGI)

Multiple version iconThere are 2 versions of this paper

Date Written: October 2009

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.

Keywords: G31, G32, G34, G35

Suggested Citation

Cronqvist, Henrik and Fahlenbrach, Rüdiger, Large Shareholders and Corporate Policies (October 2009). The Review of Financial Studies, Vol. 22, Issue 10, pp. 3941-3976, 2009, Available at SSRN: https://ssrn.com/abstract=1478810 or http://dx.doi.org/hhn093

Henrik Cronqvist (Contact Author)

Chapman University - The George L. Argyros College of Business and Economics ( email )

1 University Drive
Orange, CA 92866
United States

Rüdiger Fahlenbrach

École Polytechnique Fédérale de Lausanne ( email )

Quartier UNIL-Dorigny
Extranef 211
1015 Lausanne, CH-1015
Switzerland
++41-21-693-0098 (Phone)
++41-21-693-3010 (Fax)

HOME PAGE: http://https://www.epfl.ch/labs/sfi-rf/

Swiss Finance Institute

c/o University of Geneva
40, Bd du Pont-d'Arve
CH-1211 Geneva 4
Switzerland

European Corporate Governance Institute (ECGI) ( email )

c/o the Royal Academies of Belgium
Rue Ducale 1 Hertogsstraat
1000 Brussels
Belgium

Do you have negative results from your research you’d like to share?

Paper statistics

Abstract Views
1,634
PlumX Metrics