Block Ownership, Investment and Uncertainty: Evidence from U.S. Firms

36 Pages Posted: 10 Oct 2019

See all articles by Abhay Abhyankar

Abhay Abhyankar


Jinlin Li

University of Exeter Business School

Date Written: September 27, 2019


We study how macroeconomic, firm-level and higher-order uncertainty affects real corporate investment in firms with different levels of active and passive block ownership. Our ownership data are extracted from statutory SEC filings that block-holders are required to file indicating their active or passive status. Our main results are as follows. First, investment is more sensitive, to firm-level compared to macroeconomic and higher-order uncertainty shocks. Second, one standard deviation change in all types of uncertainty shocks has a higher negative effect on investment rate for firms held by active block-holders than for those held by passive block holders. Higher-order uncertainty has the most negative impact followed by macro-economic and firm-level uncertainty. Third, using a Bartik-style instrument for firm-level uncertainty we find that our main results still hold. Taken together, these results imply that the stated intentions of block-holders in statutory filings have an impact on how firm investment reacts to future economic uncertainty. Our results have implications for the current debate about the effects of ownership concentration in publicly listed firms.

Keywords: Block Ownership, Corporate Investment, Uncertainty

JEL Classification: G3, G31

Suggested Citation

Abhyankar, Abhay and Li, Jinlin, Block Ownership, Investment and Uncertainty: Evidence from U.S. Firms (September 27, 2019). Available at SSRN: or

Abhay Abhyankar

MOVE ( email )

Campus de Bellaterra-UAB Edifici B
Cerdanyola del Vallès
Barcelona, Catalunya 08193

Jinlin Li (Contact Author)

University of Exeter Business School ( email )

Streatham Court
Xfi Building, Rennes Dr.
Exeter, EX4 4JH
United Kingdom

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