The Wall Street Stampede: Exit As Governance with Interacting Blockholders
| Autor: | Konstantinos E. Zachariadis, Amil Dasgupta, Dragana Cvijanovic |
|---|---|
| Rok vydání: | 2019 |
| Předmět: |
HB Economic Theory
Economics and Econometrics History HG Finance Polymers and Plastics business.industry Strategy and Management Corporate governance Institutional investor Equity (finance) Monetary economics Industrial and Manufacturing Engineering Hedge fund Incentive Accounting Capital asset pricing model Business Herding Business and International Management Finance |
| Zdroj: | SSRN Electronic Journal. |
| ISSN: | 1556-5068 |
| DOI: | 10.2139/ssrn.3473877 |
| Popis: | In firms with multiple blockholders governance via exit is affected by how blockholders react to each others' exit. Institutional investors, who hold the majority of equity blocks, are heterogeneous in their incentives. How do these incentives affect the manner in which institutional blockholders respond to each others' exit? We present a model that shows that open-ended institutional investors, who are subject to investor redemption risk, will be sensitive to an informed blockholder's exit, giving rise to correlated exits and strengthening governance. Thus, exposure to redemption risk, universally a negative force in asset pricing, plays a positive role in corporate governance. Using data on engagement campaigns by activist hedge funds we present large-sample evidence consistent with our theoretical mechanism. |
| Databáze: | OpenAIRE |
| Externí odkaz: |
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