Blockholder Heterogeneity, Multiple Blocks, and the Dance Between Blockholders

Review of Financial Studies, Forthcoming

49 Pages Posted: 9 Jan 2017 Last revised: 30 Dec 2018

See all articles by Charles J. Hadlock

Charles J. Hadlock

Michigan State University - The Eli Broad College of Business and The Eli Broad Graduate School of Management

Miriam Schwartz-Ziv

Hebrew University of Jerusalem - Department of Finance and Banking; ECGI (European Corporate Governance Institute)

Date Written: December 27, 2018

Abstract

We study blockholder presence in a large panel and document substantial heterogeneity in holding periods, position sizes, and positions taken across blockholder types. Nonfinancial blocks are more likely to be observed in smaller, riskier, younger, and less liquid firms. These patterns are either not evident, or are reversed, for financial blocks. For all but small financial blocks, we detect significant negative interdependence in blockholder investment decisions, with the presence of one blockholder crowding out others, a behavior that appears causal. Small financial blocks often coexist in the same firm, an outcome that appears to reflect correlated investment styles.

Keywords: Blockholders, blocks, shareholders

JEL Classification: G30

Suggested Citation

Hadlock, Charles J. and Schwartz-Ziv, Miriam, Blockholder Heterogeneity, Multiple Blocks, and the Dance Between Blockholders (December 27, 2018). Review of Financial Studies, Forthcoming, Available at SSRN: https://ssrn.com/abstract=2894688 or http://dx.doi.org/10.2139/ssrn.2894688

Charles J. Hadlock

Michigan State University - The Eli Broad College of Business and The Eli Broad Graduate School of Management ( email )

315 Eppley Center
East Lansing, MI 48824-1121
United States
517-353-9330 (Phone)
517-432-1080 (Fax)

Miriam Schwartz-Ziv (Contact Author)

Hebrew University of Jerusalem - Department of Finance and Banking ( email )

Mount Scopus
Jerusalem, 91905
Israel

ECGI (European Corporate Governance Institute) ( email )

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

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