Gotowa bibliografia na temat „Blockholders”

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

Blockholding has long been perceived as a harmful force to corporate governance due to its alleged exacerbation of minority expropriation, which is the core theoretical justification of recent worldwide ‘anti-blockholding’ regulatory movements. However, two facts should not be neglected that, first, although blockholding imposes risks of deepening Type II agency conflicts in public companies, it serves a crucial corporate governance role to minimise the Type I agency problem. Therefore, whether tightening rules that might disincentive blockholding is warranted can only be determined if the expected benefits outweigh associated costs. Second, while theories suggest that concentration empowers blockholders to expropriate minority shareholders’ interests, it is largely based on an over-simplified assumption that blockholders are homogeneous, sharing the same incentives and behaviours. To this end, viewing corporate governance as the reflection of a firm’s agency conflicts, this thesis aims to facilitate a more balanced view with a focus on disentangling the interactions between corporate governance and the nature of blockholders; particularly effects from the most passive blockholder type – state, and the most active type – hedge fund activists. Seeing audit fee as an indicator of firm’s extent corporate governance effectiveness, the thesis first examines the individual and joint impacts of the controlling shareholder’s (CS’s) three attributes – types, the level of control and control-ownership wedge – on audit pricing of Chinese public companies. Contrary to extant research suggesting that control concentration monotonically enlarges the agency problem and, eventually, audit fees, findings suggest such a relationship depends on the nature of control. It is interesting to find that the voting rights level of state CS is significantly negatively related to audit fee; whereas that of non-state counterparts is significantly opposite. This supports the view that auditors are likely to recognise incentive alignment as the dominant effect introduced by state control and entrenchment effect as the threat brought by non-state control. Furthermore, evidence suggests that auditors tend to perceive two-right divergence for non-state CSs as intentional and a risk indicator; but see that for state CSs as the expanding of control chain, which wears away the risk mitigation effects. To some extent, this thesis illustrates that control concentration, per se, does not necessarily impair corporategovernance; rather this impairment is caused by CSs’ unethical incentive and excessively large control without bonded ownership. Moreover, using a proprietary dataset of hedge fund activists together with 2002-2014 SEC 13D(/A) filings in US markets, this study next examines the impact of hedge fund activism (HFA) on risk perception of auditors, proxied by audit fee. It proposes that there should be a ‘learning curve’ for stakeholders to recognise long-term corporate governance benefits brought by this new wave of shareholder activism. Consistent with expectations, results show that, relative to those of matched controls, audit fee for HFA-targeted companies exhibits no differences pre-intervention; however, these differences emerge and increase significantly in the first three post-intervention audit engagements, followed by a fall back to the fifth post-event year. Furthermore, findings suggest that the post-intervention fee drop is negatively associated with the auditor-HFA experiences/encounters. Findings also suggest that these audit fee dynamics do not result from indirect effects caused by changes of firm’s fundamentals. Taken together, the results suggest that policymakers should not be urged to tighten regulations on HFA but instead should allow more time for this new breed of activist blockholder to be understood. Once the intangible perception gap between third party and presence of blockholders was addressed, in the final empirical analysis, this research further investigates tangible impacts of HFA on portfolio companies’ choice between real activity (REM) and accrual-based earning management (AEM) techniques as a result of their influences on the strategic aspect of corporate governance. Specifically, results suggest that target firms’ REMs via reducing/postponing R&D and SG&A expenses declined significantly during HFAs’ holding period; as well as after shares being withdrawn. This not only indicates that HFAs suppressed managers’ intention to deliver earnings at the cost of long-term performance; but also that such beneficial influences persisted in the short- and long-term periods after HFA’s disposal of shares. On the AEM side, the study reveals a significant increase in AEM after HFA intervention. This supports the expectation that targeted companies reallocate reduced earnings to AEM as a result of HFAs’ demand for balancing stakes among stakeholders and earnings-smoothing. Overall, these findings support the previous view that HFA serves as a remedy for extant corporate governance.

This dissertation investigates three types of investment manager trading behaviour to ascertain whether behavioural biases are present in the Australian investment management industry. In particular, this thesis examines whether these biases are detrimental to fund performance and market efficiency, and whether there is a need for regulatory review given the behaviour of institutions in their trading on the Australian Securities Exchange (ASX). The three empirical issues examined in this thesis are: leader and follower patterns in institutional trading; quarter-end gaming behaviour; and short-term trading activity and the role of institutional monitoring. Firstly, in the analysis of leader-follower behaviour, this thesis finds profitable trade packages are executed using multiple brokers as a way to accumulate a larger package in a shorter window of time and as means of enhancing disguise. Profitability is higher when these trade packages are mimicked and when there are up to three mimickers, compared to situations in which no mimicking occurs. Potential mimickers do not appear to ignore their own signal when deciding whether or not to follow when the sequence is short, but may do so for longer sequences as predicted by Grenadier (1999). It is concluded that short sequences of mimicking trades by active fund managers speed the price discovery process. Secondly, in an investigation of ??portfolio pumping?? by Australian active investment managers, this thesis finds significant abnormal stock and fund returns on the final business day of the calendar quarter-end. This thesis then identifies particular trades, appearing mostly in less liquid stocks, which accompany stocks that are marked up at quarter-end (it is not possible in this thesis to prove causation given the trades in this sample are not time-stamped). Fund managers execute more purchases than normal on the last day of the quarter in stocks in which they are overweight, providing strong evidence that manager behaviour is modified on the last day of the quarter-end. This study also finds poor-performing managers are more likely to perpetrate gaming trades, which may be as a result of career concerns and business risk management. New investors in funds would benefit substantially by delaying their entry to the fund until the day after the end of the quarter, as there is a lower entry price into the fund. However, portfolio pumping does not substantially affect the returns of extant fund investors, as the trading cost associated with the relatively small gaming trades is relatively small. Attempts by the ASX to reduce price manipulation, such as instituting a closing price call auction and then later revising the algorithm of this auction, have been effective in limiting both the number of occurrences, as well as the severity of gaming on the efficiency of the market. Thirdly, in an examination of the short-term trading activity of active investment managers which threaten exit, this thesis find that a larger number of actively trading multi-blockholders significantly raises firm performance. It remains true that an individual blockholder who intervenes to raise firm performance has to share gains with other blockholders. But firm manager effort is enhanced by the threat of exit by blockholders when they receive a bad signal concerning managerial effort. This study tests seven nested hypotheses proposed by Edmans and Manso (2008) using sequences of short-term institutional trades that threaten exit. Blockholder net profit is diminishing in the number of traders, consistent with a common signal of poor managerial performance. Moreover, these trade sequences are profitable even after transaction costs. Spreads are lower and the firm??s share price becomes more sensitive to managerial performance as more blockholders threaten exit. From the three broad investigations into fund manager activity this thesis undertakes, active fund managers are shown to behave rationally and, apart from their behaviour at quarter-end, they act in the interests of their investors, aid price discovery, reduce bid-ask spreads and thereby exhibit a positive influence on market efficiency.

The objective of this study is to provide empirical evidence on how ownership structure and owner’s identity affect performance, in the banking industry by using a panel of Indonesia banks over the period 2000–2009. Firstly, we analysed the impact of the presence of multiple blockholders on bank ownership structure and performance. Building on multiple agency and principal-principal theories, we investigated whether the presence and shares dispersion across blockholders with different identities (i.e. central and regional government; families; foreign banks and financial institutions) affected bank performance, in terms of profitability and efficiency. We found that the number of blockholders has a negative effect on banks’ performance, while blockholders’ concentration has a positive effect. Moreover, we observed that the dispersion of ownership across different types of blockholders has a negative effect on banks’ performance. We interpret such results as evidence that, when heterogeneous blockholders are present, the disadvantage from conflicts of interests between blockholders seems to outweigh the advantage of the increase in additional monitoring by additional blockholder. Secondly, we conducted a joint analysis of the static, selection, and dynamic effects of different types of ownership on banks’ performance. We found that regional banks and foreign banks have a higher profitability and efficiency as compared to domestic private banks. In the short-run, foreign acquisitions and domestic M&As reduce the level of overhead costs, while in the long-run they increase the Net Interest Margin (NIM). Further, we analysed NIM determinants, to asses the impact of ownership on bank business orientation. Our findings lend support to our prediction that the NIM determinants differs accordingly to the type of bank ownership. We also observed that banks that experienced changes in ownership, such as foreign-acquired banks, manifest different interest margin determinants with respect to domestic or foreign banks that did not experience ownership rearrangements.

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Estudos teóricos e empíricos recentes sugerem que os blockholders, acionistas com participação maior ou igual a 5%, exercem poder como mecanismo de governança corporativa nas empresas. O poder de governança dos blockholders pode ser exercido através de dois mecanismos: intervenção (“voz”), que se refere à disposição dos acionistas de incorrer em atividades dispendiosas para aumentar o valor da empresa; e pela ameaça da saída (“exit”), que se refere à ameaça da venda de ações da empresa no mercado. Pesquisas acadêmicas recentes tem sido realizadas nesta área, relacionando a presença de blockholders com a eficiência gerencial, sobretudo no contexto americano. Estes estudos fornecem evidências consistentes que a ação dos blockhloders nas empresas pode afetar o comportamento gerencial. Entretanto, poucos estudos abordam diretamente a relação dos blockholders com o valor das empresas. Ademais, estudos que avaliam se a presença de blockholders realmente disciplina a gestão são escassos nos países emergentes. De um modo geral, os blockholders são acionistas com participação relevante no quadro acionário e, em decorrencia deste fato, em tese, possuem fortes incentivos para monitorar, coletar informações privadas e intervir junto aos controladores e à gestão, reduzindo custos de agência, e consequentemente, aumentanto o valor das empresas. Neste sentido, a fundamentação das hipóteses desta tese defende que a presença de blockholders na estrutura de propriedade das empresas brasileiras relaciona-se positivamente com a criação de valor, e que a força desta relação depende das variáveis participação acionária, número de blockholders, sensibilidade dos gestores ao preço das ações, liquidez das ações da empresa, dos tipos de blockholders, da diversidade dos tipos de blockholders, do nível de ativismo e das inter-relações entre os blockholders nas empresas. Para resolução das hipóteses desta tese, a amostra foi constituída por 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 desta tese, formularam-se seis hipóteses, sendo que para cada hipótese 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). Salienta-se que, para os modelos onde utilizou-se o Q aplicou-se dados em painel com efeitos fixos, e nos modelos onde utilizou-se o R aplicou-se dados em painel com pooled, conforme orientação dos testes econométricos preliminares. Os resultados gerais desta pesquisa indicam que a simples presença de blockholders, nas companhias brasileiras, não produz os resultados encontrados na literatura teórica e empírica, que fundamentaram a base desta tese. Pelo contrário, os resultados indicam uma relação negativa entre a presença dos blockholders e o valor das empresas brasileiras para ambas as métricas de valor utilizadas. Os diferentes resultados em relação aos apresentados pelos modelos teóricos e empíricos encontrados nos EUA são explicados pelas características peculiares do mercado brasileiro, especialmente no que tange às diferenças em relação à estrutura de propriedade. Num mercado como o dos EUA, um blockholder com 5% de participação na empresa é um grande acionista, é uma ameaça aos controladores e à gestão, já que lá o controle é exercido, na maioria das vezes, com menos do que 50% do capital total. No Brasil, na maioria das vezes, as empresas possuem controle acionário definido, com isso o blockholder não tem a mesma força. Desta forma, como observado nesta pesquisa, os blockholders brasileiros, em maioria, são passivos. Essa passividade faz com que os controladores e ou gestores da empresa utilizem os blockholders para diluição do capital acionário e dos direitos sobre o fluxo de caixa da empresa, o que aumenta os incentivos de expropriação por parte dos controladores e gestores, elevando os custos de agência e reduzindo o valor das empresas. No mesmo sentido, percebe-se que as métricas relacionadas com a força dos blockholders como mecanismo de governança não possuem efeito positivo na relação dos blockholders com a criação de valor das empresas. Pelo contrário, as métricas vinculadas à participação acionária e ao número de blockholders relacionam-se negativamente com a criação de valor nas empresas, reforçando o argumento teórico de que a diluição do capital acionário e do fluxo de caixa do controlador aumenta os incentivos deste em expropriar. Os diferentes tipos de blockholders ou a heterogeneidade destes, na maioria dos casos, não apresentou relação com a criação de valor nas empresas. Em relação à diversidade dos blockholders presentes na estrutura de propriedade das empresas, conclui-se que esta afeta negativamente o valor das empresas, ou seja, quanto mais tipos diferentes de blockholders presentes na estrutura de propriedade das empresas, pior são os resultados em relação às métricas de criação de valor. Entretanto, quando se identifica a presença nas empresas brasileiras de blockholders ativos e suas inter-relações, percebe-se que, nesta situação, os blockholders potencializam o efeito de criação e o valor na empresa, convergindo com as premissas teóricas apresentadas por estudos americanos que fundamentaram esta tese. Essa aproximação dos resultados pode ser atribuída ao perfil dos investidores ativos brasileiros que realmente agem como mecanismo de governança, o que acontece na maioria dos casos com os blockholders no mercado americano. Os resultados desta tese permitem o avanço da literatura nacional e internacional sobre o tema, demonstrando que, sob uma estrutura de propriedade concentrada, sobretudo com a presença da figura de um “dono” e/ou acionista majoritário nas empresas, como é o caso brasileiro, a interferência dos blockholders, de forma geral, no monitoramento da gestão, se torna mais difícil. No ambiente brasileiro a maioria dos blockholders não consegue utilizar o seu poder de voz, em decorrência da alta concentração de propriedade e das dificuldades de exercer influência efetiva junto ao controlador ou à gestão. No mesmo sentido, também se observa uma dificuldade em relação ao mecanismo de exit, pois a maioria das empresas listadas não fornece liquidez suficiente nos papéis para que o poder de ameaça de saída faça sentido.
Recent theoretical and empirical studies have suggested that blockholders, who hold the shares of 5% or more in companies, exercise their power as a mechanism of corporate governance. The governance power of blockholders can be exercised through two intervention mechanisms, one is "voice", which refers to the willingness of shareholders to incur costly activities to increase the value of the company, and another is the threat of exit, which refers to the threat of the sale of company shares in the market. Newly academic research have been carried out in this area, relating the presence of blockholders with managerial efficiency, especially in the American context. These studies provide consistent evidences that the action of blockhloders in companies can affect managerial behavior. However, few studies directly aproach the relationship between blockholders and companies' value. In addition, studies that assess whether the presence of blockholders actually discipline management are scarce in emerging countries. In general, the blockholders are shareholders with relevant participation in the ownership structure, as a result of this fact, in thesis, they have strong incentives to monitor, to collect private information and to intervene together with controllers or management, reducing agency costs and, consequently, increasing the companies value. In this sense, the hypotheses of this thesis argue that the presences of blockholders in the ownership structure of Brazilian companies are positively related to the creation of value, and that the strength of these relationship depends on the variables equity interest of blockholder, the number of blockholders, the managers' sensitivity to share price, liquidity of company shares, the types of blockholders, the diversity of the types of blockholders, the level of activism, and the interrelations among the blockholders in the companies. To resolve the hypotheses of this thesis, the sample was made up of Brazilian non-financial companies, whose data are available in Economática®, totaling 334 companies, with 1,899 observations. The data refer to the period from 2010 to 2016. Methodologically, to answer the purposes of this thesis, six hypotheses were formulated, and for each hypothesis, two ordinary least squares regressions were configured, with panel data, according to the metrics of value creation considered in this research, Q of Tobin (Q) and return (R). For the models where the Q was used, panel data with fixed effects were applied, and in the models where the R was used, panel data with pooled were applied, according to the orientation of the preliminary econometric tests. The general results of this thesis indicate that the mere presence of blockholders in Brazilian companies does not produce the kind of results which were found in the theoretical and empirical literature, which provided the basis for this thesis. On the contrary, the results indicate a negative relation between the presence of blockholders and the value of Brazilian companies for both metrics of value of this research. The different results in relation to those presented by the theoretical and empirical models found in USA are explained by the peculiar characteristics of the Brazilian market, especially with respect to the differences in ownership structure. In a market like the US, a blockholder with a 5% stake in the company is a large shareholder, is a threat to controllers and managements, since control there is exercised, for the most part, with less then 50% of the total capital. In Brazil most of the time companies have a defined shareholder control, so the blockholders does not have the same strengh. Thus, as seen in this research, Brazilian blockholders, in the majority, are passive. This passivity causes company controllers and managers to use blockholders to dilute equity capital and cash flow rights of the company, which increases expropriation incentives by controllers and managers, raising agency costs and reducing the value of companies. In the same way, it can be observed that the metrics related to the strength of the blockholders as mechanisms of governance do not have a positive effect on the relationship of the blockholders with the creation of value of the companies. On the contrary, the metrics related to the shareholding and the number of blockholders are related negatively to the creation of value in the companies, reinforcing the theoretical argument that the dilution of stock capital and the cash flow of the controller increases the incentives of controller’s expropriation. The different types of blockholders or the heterogeneity of these, in most cases, were not related to the creation of value in companies. In relation to the diversity of the blockholders present in the corporate ownership structure, it is concluded that this affects negatively the value of the companies, that means, the more types of different blockholders present in the ownership structure of the companies, the worse the results in relation to the metrics for creating value. However , when the presence of active blockholders and their interrlationsships is in identified in brazilian companies, it can be seen that, in this situation, blockholders potentiate the creation effect and value in the company, converging with the theoretical premises presented by American studies that supported this thesis. This approximation of the results can be attributed to the profile of the Brazilian active investors that really act as mechanisms of governance, which happens in most cases with the blockholders in the American market. The results of this thesis allow the advanced of the national and international literature about theme, demonstrating that under a concentrated property structure, especially with the presence of the figure of a "owner" and / or majority shareholder in companies, as in the case of Brazil, , in general, the monitoring of management becomes more difficult. In the Brazilian environment, the majority of blockholders cannot use their voice power, due to the high concentration of ownership and the difficulties of exercising effective influence with the controller or the management. In the same way, there is also a difficulty with the exit mechanism, since most listed companies do not provide sufficient liquidity in the roles for the threat of exit power to make sense.

This thesis investigates the role of blockholders in the governance of Saudi public listed companies. Saudi Arabia presents a unique setting, where religious, cultural and social factors, that are similar to those of other Arab and Islamic nations, play an important role in the day to day lives of the society. Similar to other developing countries, Saudi Arabia is characterized by a wide presence of blockholders in addition to a weak legal setting, in such context minority shareholders become prone to expropriation by controlling blockholders. In order to examine the level of influence blockholders have on corporate governance, three empirical chapters, chapters 3, 4 and 5, focus on key governance mechanisms that concern minority shareholders, namely the board of directors, dividends and audit quality, respectively. Using appropriate regression models, each study examines the influence of the different blockholder types present in the Saudi market, namely family, royal family, government, corporate, managerial and multiple blockholders, while controlling for various factors that are known to have an impact on the governance measures in question. The studies examine data from 117 non-financial listed companies in Saudi Arabia from 2008-2013, with a final sample (N) of 619 firm year observations. Overall, the results show that minority shareholder rights are fairly protected under blockholder control in Saudi public listed companies. The initial results, in chapter 3, indicate that blockholders reduce board independence and maintain control over board representation, which enables them to expropriate minority shareholders. The exclusion of outside independent directors might reflect the dominance of the Arabian culture in Saudi Arabia, which is characterized by high power distance and strong levels of secrecy in business dealings. However, further analyses, in chapters 4 and 5, reveal that blockholders actually act in the best interest of all shareholders and curb managerial self serving behavior by positively influencing the corporate governance of the firm, through improved dividend payout policy, which reduces the levels of free cash flow available for appropriation, as well as improving the firms' audit quality, by appointing Big Four auditors and independent and expert audit committee members. Collectively, these results reflect the possible role that Islamic teachings play in shaping the behavior of blockholders within the Saudi capital market, where fair treatment and just dealing represent core Islamic values, in which minority shareholders are not found to be expropriated. The Islamic ethical system promotes the protection of the rights of the various stakeholders and urges humans to act as stewards entrusted in achieving continuity and societal welfare. The results of the thesis are of interest to academics, practitioners and policy makers in developing countries in general, and the Middle East and Saudi Arabia in particular. Local and international investors become more aware of the environment of the Saudi market when prompted to make investment decisions. Policy makers also recognize the relationship between blockholders, corporate governance and minority shareholders in the Saudi market.

The aim of this thesis is to explain and predict the relationships between the diverse classes of blockholders and firm performance based on appropriate theories including agency, stewardship and resource dependence theory. The Singapore context provides a unique setting for a developed economy with concentrated ownership, unlike prior studies undertaken in the United States (US) and the United Kingdom (UK), which have relatively dispersed ownership structures.

I examine the effect of ownership structure on firms' propensities to save the proceeds of a share issuance as cash. Specifically, I focus on changes in cash savings at the time of a seasoned equity offering (SEO), a moment at which the firm experiences a large inflow of cash, to determine whether ownership structures such as managerial blockholdings or the presence of institutional investors materially affect firms' decisions regarding their level of cash savings. I find that firms with managerial blockholders are more inclined to save share issuance proceeds as cash, relative to firms with outside blockholders or no blockholders present. This finding could be interpreted as consistent with either managerial entrenchment or incentive alignment, so I distinguish between these competing forces by examining SEO announcement returns. The market's reaction to SEO announcements when managerial blockholders are present is significantly worse on average when the firm has excess cash, lending support to the entrenchment explanation. I also find that firms with greater total institutional ownership save more cash from equity issuance, which is consistent with the theory that greater firm monitoring allows optimal corporate cash holdings to increase because shareholders are less concerned about potential misuses of cash.

Using an endogenous growth framework, this thesis models and tests whether hedge fund activists add value by correcting inefficient R&D investment at their targets. While activists are more likely to target firms over-investing in R&D, I find no evidence that suggests they correct inefficient R&D investment despite decreasing R&D expenditure at target firms. Further robustness highlights the negative impact of hedge fund activism on value creation after controlling for the activist’s stated objectives and reputation, quantile treatment effects, and superior stock selection ability. Overall, my research offers new insights into the governance role and value implications of hedge fund activism.

In this chapter, we analyze three instances that illustrate the political economy of corporate governance. First, we examine how the politics of organizing financial institutions affects, and often determines, the flow of capital into the large firm, thereby affecting, and often determining, the power and authority of shareholder-owners. Second, we show how continental European nations have been slow in developing diffusely owned public firms in the years after World War II. The third political economy example deals with management in diffusely owned firms. The chapter also looks at the historical organization of capital ownership in the United States, noting how the country’s fragmented financial system limited the institutional blockholders and increased managerial autonomy over the years. Finally, it discusses the power of labor in postwar Europe, political explanations for the continuing power of the American executive and the board in recent decades, other political economy channels for corporate governance, and the limits of a political economy analysis.