Journal articles: 'Blockholders'

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Hugo Wang, Zhonghui. "On the impact of outside blockholders’ voting power." Corporate Governance 16, no. 2 (April 4, 2016): 330–46. http://dx.doi.org/10.1108/cg-05-2015-0074.

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Purpose The purpose of this paper is to complement existing research of the relationship between concentrated ownership and firm performance by theoretically exploring the impact of outside blockholders on the firm, primarily from the perspective of voting power. Design/methodology/approach This paper proposes theoretical propositions based on analyses and logical extension of results of the existing theoretical and empirical studies. Findings This paper proposes three theoretical predictions: First, voting power provides outside blockholders a necessary condition to pursue shared and private benefits of control, and it is positively correlated with blockholders’ capability of influencing firm value. Second, everything else being equal, an outside blockholder is more (less) likely to pursue private benefits than shared benefits when the equity market is efficient and when the blockholder’s voting power is less (more) than 50 per cent. Third, controlling outside blockholders can capitalize on their voting power to appoint managerial delegates and board representatives to the invested firms for the purpose of pursuing private benefits of control. Originality/value This paper tries to make two contributions to the corporate governance literature. First, this research relies on a new perspective to explore the relationship between ownership structure and firm value. Second, this paper presents the first theoretical argument which states that controlling outside blockholders rely on their managerial delegates and board representatives to pursue their private benefits of control.

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Leitterstorf, Max P., and Maximilian M. Wachter. "Takeover Premiums and Family Blockholders." Family Business Review 29, no. 2 (December 24, 2015): 214–30. http://dx.doi.org/10.1177/0894486515622721.

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Blockholders impact strategic firm decisions because they are better at monitoring managers than dispersed shareholder groups. Nevertheless, we do not sufficiently understand how preferences of different blockholder types impact strategic firm decisions. We discuss this in the context of takeover premiums offered for publicly listed firms. Prior studies have argued that managers are often tempted to offer excessively high premiums. Consistently, blockholders might better control managers and ensure lower premiums. To better understand the impact of blockholder preferences, we focus on the special case of family firms. Specifically, drawing on the behavioral agency model, we hypothesize that bidders with family blockholders offer lower premiums than bidders with other blockholders or bidders without blockholders. Our empirical results support our hypotheses based on a sample of 149 takeover offers.

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Yu, Kun. "Block ownership and accounting conservatism." Corporate Ownership and Control 10, no. 3 (2013): 272–93. http://dx.doi.org/10.22495/cocv10i3c2art2.

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This study examines the effect of outside blockholders’ ownership on conditional accounting conservatism. I find that conditional conservatism is positively associated with the ownership of outside blockholders, suggesting that conditional conservatism is a useful governance tool for outside blockholders to fulfill their monitoring role. In addition, conditional conservatism appears to be positively associated with the average ownership of outside blockholders, consistent with the view that diluting ownership among more outside blockholders decreases the monitoring strength of outside blockholders and their demand for conditional conservatism. Additional analysis suggests that outside blockholders’ ownership leads to conditional conservatism, but not vice versa. Overall, this study highlights the importance of considering blockholder characteristics in research on accounting conservatism and corporate governance.

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Kaya, Halil D., and Nancy L. Lumpkin-Sowers. "Composition of blockholders in publicly traded firms." Corporate Ownership and Control 14, no. 2 (2017): 88–97. http://dx.doi.org/10.22495/cocv14i2art9.

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The outside blockholder has become an important agent in the corporate governance literature in the United States. Understanding how his monitoring role changes as economic circumstances deteriorate is rarely considered. In this study, we examine whether the number of certain types of blockholders, as well as their ownership concentrations, will increase during recessions. By categorizing blockholders by type: affiliated, outside, employee (through Employee Stock Ownership Plans), non-officer director, and officer director, we are able to track how blockholder composition changed within firms when the economy moved from expansion in 1999 to recession in 2001. Using nonparametric tests, we show that the number of outside blockholders and their ownership stake go up during the recessionary period examined. This suggests a more important monitoring role for the outside blockholder when the economy worsens. Though we do not find a statistically significant change overall in the average number of blockholders or the total percentage of shares held across the firms in our sample for the other blockholder types when the economy moves from expansion to recession, we do see noteworthy changes in the behavior of the affiliated and ESOP blockholder at specific ownership concentration levels when the economy shifts.

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Ibrahimy, Ahmad Ibn, and Rubi Ahmad. "Blockholder Ownership as Governance Mechanism on Firm Performance: Evidence From Malaysia." International Journal of Business Administration 11, no. 1 (January 18, 2020): 27. http://dx.doi.org/10.5430/ijba.v11n1p27.

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We examined the relationship between blockholder ownership and firm performance in the context of high concentrated ownership in Malaysia coupled with weak regulatory framework. Blockholder ownership is used as monitoring device to verify the significant role in managerial decisions accordance with maximizing shareholders’ wealth. Consequently, blockholders may have personal incentive to the expropriation of minority shareholders’ wealth by exercising their corporate control. We found a positive significant relationship with small effect of beta coefficients by both market and accounting based measurements. The positive relationship of blockholders as institutions is the conformity of monitoring hypothesis. The results indicate a very week monitoring impact of blockholders on executives’ decisions that improve the firm performance by reducing the agency costs. Additionally, the significant low positive effect of profit volatility is representing the efficacy of blockholders until a certain level.

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Clifford, Christopher P., and Laura Lindsey. "Blockholder Heterogeneity, CEO Compensation, and Firm Performance." Journal of Financial and Quantitative Analysis 51, no. 5 (October 2016): 1491–520. http://dx.doi.org/10.1017/s0022109016000624.

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This paper examines heterogeneity in blockholder monitoring across investor types. We document which blockholder types (e.g., mutual funds, hedge funds) are more likely to be associated with active monitoring and show that firms targeted by such blockholders are more likely to increase the equity portion of chief executive officer (CEO) pay. Further, using market-wide and exogenous shocks to liquidity to identify differences in efficacy across blockholder types, we observe greater operating-performance improvements in actively monitored firms when passive monitoring is less effective, suggesting causal impact. We propose differences in compensation arrangements across blockholder types as a mechanism underlying blockholders’ heterogeneous role.

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Kaya, Halil D., and Nancy L. Lumpkin-Sowers. "The reaction of blockholders to changes in market conditions." Corporate Ownership and Control 12, no. 1 (2014): 464–72. http://dx.doi.org/10.22495/cocv12i1c5p2.

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In this study, we examine the impact of business conditions and stock market conditions on blockholders’ ownership in U.S. firms. We expect that in periods when the general interest in the stock market goes up, blockholders’ interest and participation in the market will also increase (i.e. there are more blockholders per firm and the percentage share of blockholder ownership in each corporation is higher). We use the Aruoba-Diebold-Scotti (i.e. ADS) Business Conditions Index and the S&P 500 Index as proxies for business conditions and stock market conditions, respectively. We find that blockholders’ investments more closely track stock market conditions than business conditions. Our nonparametric tests show that there are more blockholders per firm when stock market conditions are better.

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Hsieh, Jim, and Tao-Hsien Dolly King. "The Importance of Blockholder Heterogeneity: Security Market Effects and Follow-On Activities." Journal of Financial and Quantitative Analysis 54, no. 1 (November 9, 2018): 101–53. http://dx.doi.org/10.1017/s0022109018000649.

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Recent research on blockholders focuses on activist hedge funds and documents positive stock but negative bond returns. This study investigates the role of blockholder heterogeneity on security market effects and target firm follow-on activities across three important dimensions: identity, motive, and purchasing method. We show that target firms’ security returns and post-acquisition activities strongly correlate with blockholder heterogeneity. Further, bond returns are significantly positive for firms with blockholders’ debt-assistance motive while both stock and bond returns are significantly negative in private placements. Overall, our findings highlight the importance of blockholder heterogeneity on the valuation and performance consequences in block acquisitions.

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Fattoum-Guedri, Asma, Zied Guedri, and Frédéric Delmar. "Multiple Blockholder Structures and Family Firm Performance." Entrepreneurship Theory and Practice 42, no. 2 (December 21, 2017): 231–51. http://dx.doi.org/10.1177/1042258717748652.

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This study examines how multiple blockholder structures affect family firm performance. Building on arguments from both principal–principal agency and familiness perspectives, we suggest that asymmetrical distribution of voting power among family and nonfamily blockholders hurts firm performance. Further, we suggest that the larger the number of blockholder types, the stronger the negative effect of voting-power asymmetry among family and nonfamily blockholders on firm performance. We provide empirical support for our hypotheses using a longitudinal sample of 413 French family firms over the 1992–2012 period.

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Masset, Philippe, Irena Uzelac, and Jean-Philippe Weisskopf. "Family Ownership, Asset Levels, and Firm Performance in Western European Hospitality Companies." Journal of Hospitality & Tourism Research 43, no. 6 (May 27, 2019): 867–89. http://dx.doi.org/10.1177/1096348019849665.

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This article uses a comprehensive sample of companies from 16 Western European countries over the period 2004 and 2016 to examine the relationship between blockholder ownership, asset levels, and corporate performance in the hospitality industry. We find evidence that both family and nonfamily blockholders display a higher use of assets in the lodging industry, but only nonfamily blockholders do so in the food and beverage industry. At the same time, nonfamily blockholders tend to display a poor performance in both industries, while this is only true for the lodging industry in the case of family-owned businesses. Finally, we show that asset levels moderate the observed ownership–performance relationship. Our results hold both for static and dynamic asset measures and taking the global financial crisis into account.

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Cacciotti, Gabriella, and Deniz Ucbasaran. "Commentary: Blockholder Structures and Power Mechanisms in Family Firms." Entrepreneurship Theory and Practice 42, no. 2 (December 26, 2017): 252–58. http://dx.doi.org/10.1177/1042258717748653.

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We extend the work of Fattoum-Guedri, Guedri, and Delmar (2018) by suggesting that the number of family blockholders moderates the relationship between the distribution of voting power between family and nonfamily blockholders and firm performance. Building on power and negotiation theories, we argue that the participation of multiple generations of family members in the firm’s ownership leads to greater diversity of perspectives that generates potential conflict over the distribution of resources. We highlight four power mechanisms—potential power, perceived power, power games, and realized power—to explain why family blockholders’ conflicting and/or misaligned preferences, objectives, and visions for the family firm might influence the nature of the negotiation between the family and the nonfamily blockholder and impact family firm performance. We offer directions for future research.

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Qian, Xiaolin, and Lewis Tam. "Blockholders and corporate governance: evidence from China’s split-share-structure reform." Review of Accounting and Finance 20, no. 1 (July 1, 2021): 53–83. http://dx.doi.org/10.1108/raf-07-2020-0184.

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Purpose Proper empirical tests of the effect of blockholders’ monitoring incentives on corporate governance are scant in the literature because the relationship between ownership structure and enforcement of corporate governance mechanisms is bidirectional. This study aims to address the endogeneity issue by examining the effect of blockholding on executive turnover–performance sensitivity, using the split-share-structure (SSS) reform in China as an exogenous shock to blockholders’ monitoring incentives. Design/methodology/approach This study uses a logit model for estimating the change in executive turnover–performance sensitivity around the SSS reform. Sub-sample analysis is conducted to examine whether the impact of SSS reform on the turnover-performance sensitivity is stronger for firms with more contestable blockholders who might consider stock liquidity, risk sharing and diversification in their monitoring/trading decisions. Findings Top executive turnover, defined as CEO or board chair turnover, becomes less sensitive to firm operating performance after the reform, mainly for firms with contestable blockholders prior to the reform. Stock liquidity and blockholders’ demand for diversification can explain the impact of contestable blockholding. Moreover, blockholding is sensitive to firm operating performance after the reform but not before it. Originality/value With few exceptions, most studies in the blockholding literature focus on the effect of blockholder monitoring on firm value. Examining an exogenous shock to blockholding, this paper provides a set of new evidence for the impact of blockholding on executive turnover–performance sensitivity. The results call for more evidence of the impact of blockholding on executive turnover from other markets.

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J Hadlock, Charles, and Miriam Schwartz-Ziv. "Blockholder Heterogeneity, Multiple Blocks, and the Dance between Blockholders." Review of Financial Studies 32, no. 11 (February 14, 2019): 4196–227. http://dx.doi.org/10.1093/rfs/hhz022.

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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 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. Received April 30, 2018; editorial decision November 23, 2018 by Editor David Denis.

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Saihi, Malek, and Amel Belanes. "What Might Drive Block Ownership In Canadian Firms? Evidence Through Count Data Models." Journal of Applied Business Research (JABR) 29, no. 4 (June 28, 2013): 1049. http://dx.doi.org/10.19030/jabr.v29i4.7915.

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This paperaddresses the following crucial question: What might influence the decision of a blockholder to enteror exit a firm? Within a concentrated ownership context, such as Canada, we investigate impact of corporategovernance, firms risk, debt, liquidity and size on increase in number ofblockholders. This studycontributes to research topic by shedding light onendogeneity and dynamic nature of ownership structure. In order to take intoaccount discreteness of additional blockholders number, we used four CountData models, namely Poisson, Negative Binomial,Zero-Inflated Poisson, and Zero-Inflated Negative Binomial models. Ourfindings show that while excessive high level of risk, free cash-flow, firmsize, institutional and insiders ownership dissuade shareholders from gettinglarge stakes, moderately high levels of risk and firm leverage encourage themto join Blockholders list.

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Basu, Nilanjan. "The structure of equity ownership: a survey of the evidence." Managerial Finance 40, no. 12 (December 1, 2014): 1175–89. http://dx.doi.org/10.1108/mf-10-2013-0294.

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Purpose – The purpose of this paper is to review recent research on the structure of equity ownership and its impact on firm value. In doing so, the paper outlines the main issues, surveys the more recent work, and highlights the most promising developments on this topic. Design/methodology/approach – The paper is a survey – as such there is no relevant research design. Findings – The paper commences from multiple surveys done a decade ago that find that the evidence on this topic is inconclusive. Since then, researchers have developed several promising lines of inquiry. These approaches – specifically the new focus on the identity of the blockholders, multiple blockholder interactions, as well as the use of structural modeling, and the use of changes in insider ownership – hold some promise of being able to provide more definitive answers. Research limitations/implications – The paper suggests that current researchers focus on newer approaches to analyzing the structure of equity ownership. Specifically, for research on blockholder ownership, the identity of blockholders as well as the interaction between blockholders are promising approaches to this topic. For research on insider ownership, structural models that have become recently popular as well as an emphasis on changes rather than levels of insider ownership are promising avenues of inquiry. Originality/value – The paper summarizes the state of research on the structure of equity ownership and in doing so provides a quick introduction to a researcher new to this topic. In addition, the paper highlights the most promising areas of inquiry on this topic.

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Ahmed, Neveen, and Ola Abdel Hadi. "Impact of Ownership Structure on Firm Performance in the MENA Region: An Empirical Study." Accounting and Finance Research 6, no. 3 (August 8, 2017): 105. http://dx.doi.org/10.5430/afr.v6n3p105.

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This paper investigates the impact of ownership structures on firm financial performance in the MENA region. The sample covers nine MENA countries (Egypt, Bahrain, Qatar, Kuwait, Tunisia, UAE, Morocco, Oman and Jordan) for the year 2014. We examine the impact of ownership structures on firm performance. Performance is proxied by Tobin-Q, ROE and ROA, while ownership structure is proxied using insider ownership, governmental, and blockholders. We control for risk, size, country effect and industry type. Our results suggest that blockholders, insider ownership and governmental ownership play a crucial role in firm performance measured by Tobin-Q, ROE and ROA respectively. Our results suggest that insider ownership negatively effects firm’s return on equity, while blockholder ownership has a positive impact on a firm’s Tobin-Q. Finally we find that governmental ownership plays a positive role on a firm’s return on assets in the MENA region.

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Crisóstomo, Vicente Lima, and Isac de Freitas Brandão. "The ultimate controlling owner and corporate governance in Brazil." Corporate Governance: The International Journal of Business in Society 19, no. 1 (February 4, 2019): 120–40. http://dx.doi.org/10.1108/cg-01-2018-0043.

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Purpose High ownership concentration makes controlling blockholders powerful enough to use private benefits of control and able to shape the corporate governance system to favor their own interests. This paper aims to examine the effect of the nature of the ultimate firm owner on the quality of corporate governance in Brazil. Design/methodology/approach Econometric models are estimated to assess whether the nature of the ultimate controlling shareholder affects the quality of the corporate governance system. Models are estimated using panel data methodology with coefficients estimated by the generalized method of moments system estimator. Findings The results show that the absence of a controlling shareholder has a positive effect on corporate governance, whereas the presence of a controlling blockholder, or a shareholder agreement among a few large shareholders, has a negative effect. This adverse effect holds when the controlling blockholder is a family or another firm. The findings are in line with the expropriation effect given that weaker corporate governance system facilitates controlling shareholders’ ability to extract private benefits of control. The findings also give support to the substitution effect as powerful blockholders take on the management monitoring function by weakening the board. Originality value Following important previous literature, the study investigates the effect of the nature of large controlling shareholders on the adoption of good corporate governance practices. The work provides additional evidence on the effect of the nature of large controlling shareholders on the quality of the corporate governance system in Brazil, taking into account the main kinds of controlling blockholders present in that market. The findings give support to both the expropriation and substitution hypotheses highlighting the presence of the principal-principal agency model in an important emerging market, Brazil.

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Chen, Victor Zitian, Aldo Musacchio, and Sali Li. "A Principals-Principals Perspective of Hybrid Leviathans: Cross-Border Acquisitions by State-Owned MNEs." Journal of Management 45, no. 7 (March 15, 2018): 2751–78. http://dx.doi.org/10.1177/0149206318764293.

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We propose a private-government principals-principals approach to understand corporate governance of state-owned multinationals. We explain how the conflicts between large government and private blockholders may affect managerial decisions in the propensity of completing a cross-border acquisition and its dollar value. We argue that conflicts among different blockholders make it difficult to pursue large-scale, cross-border deals because such conflicts may lead to a less coherent objective function and to a rejection of deals that do not satisfy these groups’ conflicting objectives. Finally, we show that such blockholder conflicts are moderated by the salience of the government’s “dual influence” on the firm in question, related to a state’s soft budget constraint and/or diplomatic advantages in countries where the host and the home markets do not enjoy a bilateral investment treaty. Empirically, we found highly supportive evidence based on a global sample of 7,564 cross-border acquisitions between 2004 and 2013.

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Ayuning Putri, Anisa Ferata. "FAKTOR-FAKTOR PENENTU VOLATILITAS HARGA SAHAM SEKTOR PERUSAHAAN PROPERTI, REAL ESTATE DAN BUILDING CONSTRUCTION." Jurnal Akuntansi dan Keuangan 8, no. 2 (September 2, 2020): 109. http://dx.doi.org/10.29103/jak.v8i2.2563.

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Abstrak : Tujuan dari riset ini adalah untuk melihat pengaruh Devidend Payout Ratio, Devidend Yield, Earning Volatility, Pertumbuhan Aset, Leverage, Ukuran Perusahaan dan Blockholders terhadap Volatilitas Harga Saham. Pada penelitian ini akan menggunakan data laporan Perusahaan Lembaga Keuangan dari Bursa Efek Indonesia (BEI) selama periode 2016-2018 dengan populasi sebanyak 201 perusahaan metode purposive sampling digunakan untuk memperoleh sampel selama 3 tahun sebayak 36 perusahaan. Data penelitian ini di analisis menggunaka analisis regresi linier berganda. Hasil analisis ditemukan bahwa Dividen Payout Ratio, Earning Volatility, Pertumbuhan Aset, Ukuran Perusahaan, Blockholdres tidak berpengaruh terhadap Volatilitas Harga Saham Sedangkan untuk variabel Dividen Yield berpengaruh terhadap Volatilitas Harga Saham.Kata kunci : Volatilitas Harga Saham, Dividen Payout Ratio, Dividen Yield, Earning Volatility, Pertumbuhan Aset, Ukuran Perusahaan, Blockholdres Abstrack : The purpose of this study is to examine the effect of Dividend Payment Ratio, Dividend Results, Productive Volatility, Estimated Assets, Leverage, Firm Size and Blockholders on Stock Price Volatility. In this study will use the report data of Financial Institution Companies from the Indonesia Stock Exchange (BEI) during the 2016-2018 period with a population of 201 companies using a purposive sampling method for a 3-year sample of 36 companies. The data of this study were analyzed using multiple linear regression analysis. The results of the analysis found that Dividend Payment Ratios, Income Volatility, Assets, Company Size, Blockholdres are not in conflict with Stock Price Volatility While for the Result Dividend variable produced on Stock Price Volatility. Keywords: Stock Price Volatility, Dividend Payout Ratio, Yield Dividend, Income Volatility, Asset Inventory, Firm Size, Blockholding

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Habbash, Murya. "Earnings management, audit committee effectiveness and the role of blockholders ownership: Evidence from UK large firms." Journal of Governance and Regulation 1, no. 4 (2012): 100–116. http://dx.doi.org/10.22495/jgr_v1_i4_c1_p1.

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The existing literature documents that the quality of financial reporting is higher when firms have effective audit committees. However, recent studies find that audit committees are not effective in family firms where agency conflicts arise between controlling and non-controlling shareholders. This study extends the previous findings by investigating the effectiveness of audit committees in firms with similar agency conflicts when one owner obtains effective control of the firm. Compared to firms with a low level of block ownership, high-blockholder firms face less agency problems due to the separation of ownership and management, but more severe agency problems between controlling (blockholders) and non-controlling shareholders (minority shareholders). Using a unique hand-collected sample, this study tests the largest 350 UK firms for three years from 2005 to 2007, and shows that firms with effective audit committees have less earnings management. This study also documents that the monitoring effectiveness of audit committees is moderated in firms with high blockholder ownership. The results are not sensitive to the endogeneity test and hold for alternative specifications of both dependent and independent variables. Overall, these findings suggest that audit committees are ineffective in mitigating the majority-minority conflict compared to their effectiveness in reducing owners-managers conflicts. These conclusions, along with some recent similar evidence (e.g., Rose, 2009 and Guthrie and Sokolowsky, 2010), may raise doubts about the monitoring role of blockholders asserted by agency theorists and widely accepted in corporate governance literature.

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Lamba, Asjeet S., and Geof Stapledon. "What motivates block share ownership?" Corporate Ownership and Control 11, no. 2 (2014): 349–63. http://dx.doi.org/10.22495/cocv11i2c4p1.

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Diffuse share ownership is not as pronounced in the U.S. as many would assume. This has led to a body of research examining large shareholders, or blockholders. Issues addressed include whether firms with a blockholder perform better or worse than widely-held firms; whether firms with a blockholder pay their executives differently to widely-held firms; and whether the presence of a blockholder increases or decreases the incidence takeovers. Another issue, which this paper explores, is what motivates block share ownership. Bebchuk (1999a, 1999b) develops a model which predicts that a firm is more likely to have a controlling blockholder if the anticipated private benefits of control at that firm are comparatively large. This paper examines the factors associated with ownership structure among publicly traded Australian firms. Our results indicate that private benefits of control are a significant factor in explaining the differences in ownership structure among Australian firms. As importantly, we also find that the relationship between the existence of a blockholder and private benefits of control is endogenous. That is, the presence of a controlling blockholder strongly influences the prevalence of these private benefits of control.

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Jerbi Maatougui, Abir, and Khamoussi Halioui. "The effect of outside blockholders on earnings management around seasoned equity offerings in French listed companies on the SBF120." Journal of Financial Reporting and Accounting 17, no. 3 (September 2, 2019): 449–67. http://dx.doi.org/10.1108/jfra-02-2018-0012.

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Purpose The purpose of this study is to test the effect of the presence of outside blockholders on earnings management around seasoned equity offerings (SEOs). Design/methodology/approach Given that SEO can be one of motivations for earnings management, the authors examined the role of outside blockholders in monitoring the opportunistic behavior of managers around 50 SEOs realized by 45 French companies during the 2005-2009 period based on panel data model. Findings The authors found that issuing firms are used for upward earnings management during the pre-offering period. Indeed, the discretionary accruals know a continuous evolution during the three years preceding SEO and peaked in the year prior to the SEO. This result led us to examine the role played by the outside blockholders on earnings management. The results provided empirical evidence that the presence of outside blockholders in SEO firms is able to restrain earnings management practices. Research limitations/implications This study allows to inform investors that French issuing firms are less overvalued in the presence of outside blockholders than in their absence. As a result, investors have an interest in participating in the SEO of firms that hold outside blockholders in their capital structure. Again, based on this study, users of financial statements can trust the reliability of the financial statements published by companies with outside blockholders because of the careful control exercised by these shareholders in the process of producing financial information. However, similar to how any research may suffer from some limitations, this work has two major limitations. Firstly, the authors examined the impact of outside blockholders on earnings management without distinguishing between the different types of blockholders (such as individual investors, pension funds, mutual funds, banks and trusts). Secondly, they have estimated the discretionary accruals by referring to a single model (Kothari et al., 2007). However, the use of two or more models for estimating accruals will lead to more robust results. Originality/value The empirical literature emphasizes the monitoring role played by these shareholders on earnings management. However, it does not distinguish between the circumstances when the monitors either lose or win from exaggerations. This research completes this lack by studying the impact of outside blockholders on earnings management around SEOs.

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D. Kaya, Halil, and Nancy L. Lumpkin-Sowers. "Does Fed policy affect blockholder behavior in U.S. publicly traded firms?" Investment Management and Financial Innovations 14, no. 1 (April 25, 2017): 153–59. http://dx.doi.org/10.21511/imfi.14(1-1).2017.01.

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This paper documents the empirical relationship between ownership concentration and monetary policy to fill out the picture for when ownership concentration is likely to change within U.S. publicly traded firms. Our sample is drawn from the Dlugosz et al. (2006) data set for firms between 1996 and 2001. The authors explore the patterns between the Federal Reserve’s policy position and ownership concentration rather than asserting causal direction between the two. This empirical paper tests alternative theories on blockholder activism by examining whether “voice” or “exit” is more dominant under contractionary monetary policy. Using the series of same direction changes in the Federal Funds Rate to establish time periods as a proxy for monetary policy in the U.S., nonparametric tests show that there are more blockholders per firm, the sum of their blockholdings in percentage terms is higher, and the total percentage held by the blockholder in U.S. firms is greater under contractionary policy periods. This supports an active theory of blockholder behavior in corporate governance.

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Edmans, Alex. "Blockholders and Corporate Governance." Annual Review of Financial Economics 6, no. 1 (December 2014): 23–50. http://dx.doi.org/10.1146/annurev-financial-110613-034455.

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Grando, Tadeu, Francisco Antônio Mesquita Zanini, Antônio Carlos Brunozi Junior, and Debora Gomes Machado. "Blockholders e criação de valor em empresas de capital aberto listadas no Brasil." Enfoque: Reflexão Contábil 40, no. 2 (March 5, 2021): 1–22. http://dx.doi.org/10.4025/enfoque.v40i2.50518.

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Estudos teóricos e empíricos sugerem que os blockholders, acionistas com participação maior ou igual a 5%, podem interferir na eficiência gerencial e, consequentemente, no valor das empresas. Neste sentido, o objetivo desta pesquisa é de avaliar as implicações da presença de blockholders na criação de valor em empresas de capital aberto listadas no Brasil. A amostra da pesquisa foi constituída por 334 empresas brasileiras abertas, não financeiras, cujos dados estão disponíveis na Economática®, totalizando 334 empresas, com 1.899 observações. Os dados se referem ao período de 2010 a 2016. Metodologicamente, para atendimento dos propósitos deste artigo, formularam-se duas hipóteses, sendo que para cada uma configuraram-se duas regressões por mínimos quadrados ordinários, com dados em painel, conforme as métricas de criação de valor consideradas nesta pesquisa, Q de Tobin (Q) e retorno (R). Os resultados gerais desta pesquisa indicam relação negativa entre a simples presença de blockholders e as métricas de criação de valor. Entretanto, quando se identifica a presença nas empresas brasileiras de blockholders ativos, percebe-se que, nesta situação, a relação é positiva para a métrica retorno (R) e não significante para a métrica Q de Tobin (Q). A contribuição teórica e empírica desta pesquisa demonstra que a influência dos blockholders na criação de valor das empresas brasileiras é diferente dos resultados apresentados por pesquisas dos Estados Unidos da América (EUA). A concentração da estrutura de propriedade brasileira, a liquidez das empresas pertencentes a esse mercado e o nível de ativismo dos blockholders brasileiros explicam estes achados.

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Supatmi, Supatmi, and Ericha Widawati. "Blockholders Ownership dan Transaksi Pihak Berelasi pada Industri Manufaktur." AFRE (Accounting and Financial Review) 4, no. 1 (August 17, 2021): 107–18. http://dx.doi.org/10.26905/afr.v4i1.5941.

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This study aims to find empirical evidences about the effect of blockholders ownership on related party transactions in manufacturing companies. This study used 140 samples of manufacturing companies listed on the Indonesia Stock Exchange during 2017-2019. Tunneling related party transactions are measured based on the number of related party transactions of trade receivables or assets other than trade receivables reported in the financial statements divided by the company's total assets, while propping related party transactions are measured based on the number of related party transactions accounts payable or liabilities other than trade payables divided with the company's total liabilities. This hypothesis was tested using panel data regression. The results shows that blockholders ownership has a positive effect on propping related party transactions, namely trade payables and other than trade payables, but has a negative effect on related party transactions other than accounts receivable. The effect of blockholders ownership on related party transactions is propping greater than tunneling. This finding is in line with agency theory that blockholders ownership encourages related party transactions by companiesPenelitian ini bertujuan untuk mendapatkan bukti empiris dampak blockholders ownership terhadap transaksi pihak berelasi pada perusahaan manufaktur. Penelitian ini menggunakan sampel 140 perusahaan manufaktur yang terdaftar di BEI tahun 2017-2019. Transaksi pihak berelasi yang bersifat tunneling diukur berdasarkan jumlah transaksi pihak berelasi piutang usaha atau aset selain piutang usaha yang dilaporkan dalam laporan keuangan dibagi dengan total asset perusahaan, sedangkan transaksi pihak berelasi bersifat propping diukur berdasarkan jumlah transaksi pihak berelasi utang usaha atau liabilitas selain utang usaha dibagi dengan total liabilitas perusahaan. Hipotesis ini diuji dengan menggunakan regresi data panel. Hasil penelitian ini menunjukkan bahwa blockholders ownership memiliki pengaruh positif terhadap transaksi pihak berelasi bersifat propping, yaitu utang usaha dan selain utang usaha namun berpengaruh negatif terhadap transaksi pihak berelasi selain piutang usaha. Pengaruh blockholders ownership terhadap transaksi pihak berelasi berisfat propping lebih besar dari tunneling. Temuan ini sejalan dengan teori agensi bahwa blokholders ownership mendorong adanya transaksi pihak berelasi yang dilakukan perusahaan.

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Mokhtar, Imani, Sharifah Raihan Syed Mohd Zain, Jarita Duasa, and Azhar Mohamad. "Blockholders and Firm Performance: A Malaysian Evidence." Journal of Social Sciences Research, SPI 1 (March 15, 2019): 18–26. http://dx.doi.org/10.32861/jssr.spi1.18.26.

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This study enhances the corporate governance literature by investigating the influence of blockholders on firm performance. Employing panel data estimations, this study works on a sample of 526 non-financial listed firms in Malaysia from 2006 to 2015. Overall, our findings reveal that firm performance is negatively associated with blockholders presence but positively related to blockholders total ownership concentration. Further examinations reveal that identity of blockholders matters in influencing performance of the firm. We also found that board governance mechanisms particularly independent directors and CEO duality play a significant monitoring role in relation to firm performance. More importantly, our findings are robust to a wide variety of performance measure which includes accounting, market and value based measures. Finally, findings of our study could facilitate the regulatory bodies and firm managers in promoting better and effective corporate governance in Malaysia. Investors may also benefit from our findings in understanding corporate governance of Malaysian firms and thus diversify their investment portfolios.

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Mokhtar, Imani, Sharifah Raihan Syed Mohd Zain, Jarita Duasa, and Azhar Mohamad. "Blockholders and Firm Performance: A Malaysian Evidence." Journal of Social Sciences Research, Special Issue 5 (December 15, 2018): 885–93. http://dx.doi.org/10.32861/jssr.spi5.885.893.

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This study enhances the corporate governance literature by investigating the influence of blockholders on firm performance. Employing panel data estimations, this study works on a sample of 526 non-financial listed firms in Malaysia from 2006 to 2015. Overall, our findings reveal that firm performance is negatively associated with blockholders presence but positively related to blockholders total ownership concentration. Further examinations reveal that identity of blockholders matters in influencing performance of the firm. We also found that board governance mechanisms particularly independent directors and CEO duality play a significant monitoring role in relation to firm performance. More importantly, our findings are robust to a wide variety of performance measure which includes accounting, market and value based measures. Finally, findings of our study could facilitate the regulatory bodies and firm managers in promoting better and effective corporate governance in Malaysia. Investors may also benefit from our findings in understanding corporate governance of Malaysian firms and thus diversify their investment portfolios.

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Liu, Kerry. "Government Ownership in Listed Firms Around the World." Studies in Business and Economics 13, no. 2 (August 1, 2018): 131–46. http://dx.doi.org/10.2478/sbe-2018-0025.

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AbstractBased on the first of its kind large-scale research on worldwide government ownership from 47 countries, the results show that government owners like to be the largest blockholders; if government is the largest blockholder, the size of its ownership is also quite big. Government ownership is mostly distributed in banks, infrastructure and public utility companies, and strategic manufacturing companies. While there are various theoretical arguments on the size and industry distribution of government ownership, this study provides first-ever empirical evidence. In sum, this paper contributes significantly and originally to our understanding on government ownership, and lay out further directions for future research on the complicated corporate governance issues of government ownership.

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Lombello, Bruno Brasil, Henrique Castro Martins, and Marcelo Cabús Klotzle. "Blockholders and firm value: Evidence from Brazil." Brazilian Review of Finance 20, no. 2 (June 19, 2022): 48–76. http://dx.doi.org/10.12660/rbfin.v20n2.2022.83645.

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This research analyzes the relationship between the presence of blockholders and the value of Brazilian firms. Our analysis comprises all non-financial listed firms in Brazil with data available in the period 2010-2019 (i.e., 1,091 firm-year observations). We estimate Ordinary Least Squares (OLS) models with firm fixed effects and use Propensity Score Matching (PSM) to pair sub-samples and mitigate selection bias concerns. Our results suggest a negative association between Tobin's Q and the presence of blockholders. Our findings contradict previous studies using samples of international firms but corroborate previous studies using Brazilian firms. We also find that companies with blockholders of the family-type have Tobin's Q lower than the other types.

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Mashingaidze, Sivave. "Corporate governance: effectiveness of Zimbabwean hard law on blockholders’ protection." Corporate Ownership and Control 11, no. 4 (2014): 549–57. http://dx.doi.org/10.22495/cocv11i4c6p5.

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The broad objective of this article is to scrutinize the effectiveness of hard law paraphernalia that are there present to protect blockholders of multilateral financial institutions in Zimbabwe. This article focused on descriptive documentary reviews of texts around financial institutions, judicial reports, and Statutory Acts. The study found and revealed that hard laws and regulations yes exist to protect blockholders but the challenge, however, was guaranteeing their enforcement making hard law highly unproductive therefore killing investor confidence in Zimbabwe. The results are quintessential for law enforcement agents, regulators of banks and mangers as they need to craft a quality effective management framework on the protection of blockholders’ equity which will attract foreign direct investment and that will promote the country’s economic development.

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Byun, Sanghyuk, and Youngjoo Lee. "Informational Advantage of Institutional Blockholders." Asian Review of Financial Research 34, no. 1 (February 28, 2021): 81–106. http://dx.doi.org/10.37197/arfr.2021.34.1.2.

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Ge, Xiaochi, Pawel Bilinski, and Arthur Kraft. "Institutional Blockholders and Voluntary Disclosure." European Accounting Review 30, no. 5 (September 30, 2021): 1013–42. http://dx.doi.org/10.1080/09638180.2021.1979418.

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Newton, David, and Imants Paeglis. "Do Large Blockholders Reduce Risk?" Journal of Applied Corporate Finance 31, no. 1 (March 2019): 95–112. http://dx.doi.org/10.1111/jacf.12332.

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Gilson, Stuart C. "Bankruptcy, boards, banks, and blockholders." Journal of Financial Economics 27, no. 2 (October 1990): 355–87. http://dx.doi.org/10.1016/0304-405x(90)90060-d.

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Leitterstorf, Max Peter, and Maximilian Martin Wachter. "Takeover Premiums and Family Blockholders." Academy of Management Proceedings 2015, no. 1 (January 2015): 14399. http://dx.doi.org/10.5465/ambpp.2015.14399abstract.

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Jiang, Fuxiu, Yunbiao Ma, and Xue Wang. "Multiple blockholders and earnings management." Journal of Corporate Finance 64 (October 2020): 101689. http://dx.doi.org/10.1016/j.jcorpfin.2020.101689.

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Ahn, Hong Bok, and Kang Deuk Choi. "Cash Holdings, Firm’s Innovation and Blockholders." Korean Data Analysis Society 19, no. 1 (February 28, 2017): 453–64. http://dx.doi.org/10.37727/jkdas.2017.19.1.453.

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Chung, Chune Young, Sang Jun Cho, Doojin Ryu, and Doowon Ryu. "Institutional blockholders and corporate social responsibility." Asian Business & Management 18, no. 3 (January 4, 2019): 143–86. http://dx.doi.org/10.1057/s41291-018-00056-w.

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Basu, Nilanjan, Imants Paeglis, and Mohammad Rahnamaei. "Multiple blockholders, power, and firm value." Journal of Banking & Finance 66 (May 2016): 66–78. http://dx.doi.org/10.1016/j.jbankfin.2016.01.001.

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41

Ellili, Nejla Ould Daoud. "The ownership structure, the board of directors and the corporate performance: Complementarity or substitutability? Evidence from companies listed on Abu Dhabi stock exchange." Corporate Ownership and Control 9, no. 3 (2012): 276–87. http://dx.doi.org/10.22495/cocv9i3c2art5.

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This study investigates the interrelations between the ownership structure, the board of directors and the performance of the companies using annual data for 33 companies listed on Abu Dhabi Stock Exchange during the period 2007 - 2009. The system of the simultaneous equations shows important interrelations between the managerial ownership and board of directors’ characteristics. The managerial ownership appears substitutable to the blockholders ownership, institutional ownership and the board size while it is complementary to the board duality. Our results show also that the board duality and the financial policy of the company are substitutable, while the blockholders ownership, the institutional and the board size are complementary governance mechanisms. Our empirical results show also that the relationship between the managerial ownership and the corporate performance is not significant and that the managerial ownership is endogenous and it depends, among others, on the corporate performance. Moreover, the blockholders ownership, the institutional ownership and the board size have all negative impacts on the performance, while the board duality, the age and the firm size guarantee a better performance of the company.

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Ben Sedrine Goucha, Nadia, and Nadia Loukil. "Blockholders, board structure and liquidity: evidence from Tunis stock exchange." Corporate Ownership and Control 5, no. 3 (2008): 428–33. http://dx.doi.org/10.22495/cocv5i3c4p2.

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This paper investigates the effect of blockholders and board structure into stock liquidity in Tunisian market. We use five measures of liquidity in order to detect the multidimensionality of liquidity: immediacy cost, price impact, trading frequency, trading speed and total transaction cost. Results show that blockholders, insiders or outsiders, reduce trading speed, while ownership concentration and board characteristic effect on liquidity depend on liquidity dimension considered. Insider ownership concentration enhances price impact. Outsider ownership concentration induces a high trading activity. A large board size improve firm transparency reduces transactions cots. A high proportion of outsider directors increase trading speed.

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Gerken, William C. "Blockholder Ownership and Corporate Control: The Role of Liquidity." Quarterly Journal of Finance 04, no. 01 (March 2014): 1450003. http://dx.doi.org/10.1142/s2010139214500037.

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Employing an instrumental variable approach based on the regulatory change of tick sizes, I examine the link between the liquidity of a firm's equity and activism by large shareholders. I find that liquidity increases the likelihood of block formation. Blockholders of more liquid securities take smaller stakes that do not precommit them to monitor. I find evidence that the threat of exit from a block can discipline managers and that this threat is more effective when liquidity is higher. While liquidity increases exit from existing blocks, I find no evidence that share illiquidity that forces blockholders to actively monitor.

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Agrawal, Anup, and Tareque Nasser. "Blockholders on Boards and CEO Compensation, Turnover and Firm Valuation." Quarterly Journal of Finance 09, no. 03 (July 2019): 1950010. http://dx.doi.org/10.1142/s2010139219500101.

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We find that the presence of independent directors who are blockholders (IDBs) in firms promotes better CEO contracting and monitoring, and higher firm valuation. Using a panel of about 11,500 firm-years with a unique, hand-collected dataset on IDB-identity and a novel instrument, we find that firms with IDBs have lower excess CEO pay, lower flow and stock of CEO equity incentives, and higher valuations. These effects are substantial and robust. Our findings imply that by making it easier for blockholders to obtain a board seat, proxy access rules or bylaws can benefit shareholders.

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Acheson, Graeme G., Gareth Campbell, John D. Turner, and Nadia Vanteeva. "Corporate Ownership, Control, and Firm Performance in Victorian Britain." Journal of Economic History 76, no. 1 (February 25, 2016): 1–40. http://dx.doi.org/10.1017/s0022050716000450.

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Scholars have long debated whether ownership matters for firm performance. The standard view regarding Victorian Britain is that family-controlled companies had a detrimental effect on performance. In this article, we examine this view using a hand-collected corporate ownership dataset. Our main finding is that it was not necessarily the broad structure of corporate ownership that mattered for performance, but whether family blockholders had a governance role. Large active blockholders tended to increase operating performance, implying that they reduced managerial expropriation. Contrastingly, we find that directors who were independent of large owners were more likely to increase shareholder value.

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Bozec, Yves. "Are Canadian closely-held firms perceived to report low quality accounting information? Empirical evidence." Corporate Ownership and Control 4, no. 1 (2006): 195–208. http://dx.doi.org/10.22495/cocv4i1c1p3.

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The objective of this study is to provide empirical evidence as to how corporate ownership structure in Canada affects earnings informativeness, as measured by the earnings-return relationship. Like those in many countries around the world, Canadian publicly traded companies are characterized by both concentrated ownership and divergence between voting rights and cash-flow rights. Like those in many other countries, their main agency problem resides in the conflict between large controlling blockholders and minority shareholders. These large dominant shareholders, with their imposing block of voting rights, are likely to influence accounting-information reporting. In this paper, we test whether large dominant shareholders are perceived to report low quality earnings. We show that earnings informativeness depends directly on the ownership structure of publicly traded firms. Furthermore, we show that investors perceive reported earnings as least credible when a controlling blockholder has both the power and impetus to expropriate minority shareholders, which suggests a non-monotonic relationship between earnings informativeness and ownership structure

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Ngui, Kwang Sing, Mung Ling Voon, Ee Yaw Seng, and Ai Ling Lim. "Relationship between firm ownership and performance: the mediating role of internal governance mechanisms." Corporate Ownership and Control 5, no. 4 (2008): 461–70. http://dx.doi.org/10.22495/cocv5i4c5p6.

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This paper explores the role of selected internal governance mechanisms as mediators of the relationship between ownership and firm performance. Data from 2004 and 2005 was gathered from 177 firms listed on Bursa Malaysia. Structural equation modelling was used as the primary statistical analysis approach. Insiders and blockholders were found to compete for board dominance. Selected internal governance mechanisms mediate the effect of ownership on performance, suggesting that these were used to advance the investment interests of insiders/ blockholders. The paper provides empirical support for the interest-alignment hypothesis, arguing that the use of governance mechanisms that align the interest of managers and shareholders are more effective than monitoring mechanisms

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Rocca, Maurizio La, and Fabiola Montalto. "THE VALUE OF BLOCKHOLDERS SHAPED BY MODERATORS." Journal of Business Economics and Management 14, Supplement_1 (December 24, 2013): S313—S327. http://dx.doi.org/10.3846/16111699.2013.794750.

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This paper investigates the role of moderators in affecting the relationship between ownership and value. The results generally reveal a positive influence of blockholders on performance, that is significantly affected by moderating factors. The link becomes negative in listed firms, as well as in family ones, and vanishes in financial constrained ones. Moreover, in case of managerial opportunism, the role of blockholders increases the positive effect of ownership on performance. Conversely, new governance reforms, improving the investors’ protection, have resized the centrality of the majority shareholder. Overall, results can be used to make recommendations on how to improve corporate and country-specific governance mechanisms.

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Kim, Yu-Jin. "Characteristics of Foreign Blockholders and Credit Ratings." Korean Academic Association of Business Administration 31, no. 8 (August 30, 2018): 1509–26. http://dx.doi.org/10.18032/kaaba.2018.31.8.1509.

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Sekerci, Naciye, and Don Pagach. "Firm Ownership and Enterprise Risk Management Implementation: Evidence from the Nordic Region." Journal of Risk and Financial Management 13, no. 9 (September 15, 2020): 210. http://dx.doi.org/10.3390/jrfm13090210.

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The purpose of this paper is to investigate whether firm ownership characteristics can explain demand for Enterprise Risk Management (ERM) implementation. Specifically, we examine the relationship between the presence of large shareholders, multiple blockholders and a dual-class share structure, and ERM implementation. To our knowledge we provide the first evidence on the effect of multiple blockholders and dual-class share structures on the implementation of ERM. ERM best practices can be considered as governance tools, used to monitor managerial discretion in risk management, ultimately reducing the agency cost of risk management. Accordingly, we analyze the demand for ERM in certain governance (e.g., ownership) settings. We use quantitative methods in our study: survey and regressions (tobit and logit models). Ownership data is hand-collected while ERM data comes from a survey conducted in the Nordic region. We find that ERM is implemented less frequently in firms where there are multiple blockholders, and where large controlling owners hold dual-class shares. These findings indicate that there is less demand for ERM’s monitoring role in firms that are associated with high agency costs. Given the increasing use of dual-class share structures, we believe further examination of ownership characteristics and corporate risk management is warranted.

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Journal articles on the topic 'Blockholders'

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