Posted: 28 Sep 2009
Date Written: October 2009
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: 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