Contracts Between Firms and Shareholders

Journal of Accounting Research, Volume 58, Issue 2

Posted: 1 Jul 2020

See all articles by Jordan Schoenfeld

Jordan Schoenfeld

Dartmouth College - Tuck School of Business

Multiple version iconThere are 2 versions of this paper

Date Written: May 1, 2020

Abstract

Theory predicts the existence of explicit bilateral contracts between firms and expert shareholders. I assemble and analyze a large‐scale data set of these contracts. Using block investments from 1996 to 2018, I find that these contracts involve mainly corporate owners and activist owners, and often specify covenants pertaining to financing, trading, directorships, dividends, joint ventures, corporate investment, financial reporting, and information access. I also find that some of the contract covenants are stated in terms of accounting information, and that the prevalence of these contracts is significantly positively associated with measures of information asymmetry between managers and shareholders. Overall, this study provides some of the first systematic evidence on explicit bilateral contracts between firms and shareholders.

Keywords: agency problems; corporate governance; shareholder contracts

JEL Classification: G32; G34; K22; L22

Suggested Citation

Schoenfeld, Jordan, Contracts Between Firms and Shareholders (May 1, 2020). Journal of Accounting Research, Volume 58, Issue 2, Available at SSRN: https://ssrn.com/abstract=3622550

Jordan Schoenfeld (Contact Author)

Dartmouth College - Tuck School of Business ( email )

Hanover, NH 03755
United States

Here is the Coronavirus
related research on SSRN

Paper statistics

Abstract Views
59
PlumX Metrics