Firm Value and External Blockholdings

Shome, Dilip K.; Singh, Sudhir Kumar

doi:10.2307/3665947

Cited by 72 publications

(32 citation statements)

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“…Turning to external features of governance, it might be expected that external blockholders would exercise the same scrutinizing role as external directors, but the empirical findings for conventional companies are mixed. Bethel et al (1998) find that purchases by blockholders have a positive impact on profitability and, consistent with this, Barclay and Holderness (1991) and Shome and Singh (1995) both report that share prices rise when block purchases are announced. On the other hand, Agrawal and Knoeber (1996), Wahal (1996), Faccio and Lasfer (2000), and Bhagat and Black (2002) find no link between firm performance and external blockholdings.…”

Section: The Research Context and The Current Studysupporting

confidence: 54%

The Impact of Corporate Governance on Closed‐end Funds

Gemmill¹,

Thomas²

2006

Euro Fin Management

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"This study uses a large sample of UK-listed closed-end funds to examine whether governance has an impact on two indicators of fund performance: the level of fund-management fees and the discount at which a fund trades. Fees are under the control of the directors, and we find that they are inversely related to fund returns, even after allowing for differences across investment sectors. Fees are, on average, higher if a fund has a large board, few directors from outside the fund-family, many directors from within the fund-family, and low ownership by the management company. Discounts for funds are wider if the management company or any blockholder has a significant long-term stake, suggesting that investors are wary of entrenched management. The results suggest that boards are frequently compromised in their duty to shareholders by their dependence on fund-management companies." Copyright 2006 The Authors Journal compilation (c) 2006 Blackwell Publishing Ltd.

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Section: The Research Context and The Current Studysupporting

confidence: 54%

The Impact of Corporate Governance on Closed‐end Funds

Gemmill¹,

Thomas²

2006

Euro Fin Management

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“…Servaes (1990, 1995) report no relation between fi rm performance and several proxies for block positions: the size of a fi rm's largest single block position, the total percentage of shares held in block positions, and a dummy indicating the presence of a blockholder. Likewise, both Shome and Singh (1995) and Agrawal and Knoeber (1996) fail to detect any evidence that blockholders play an important role in better performance. In contrast, Lasfer (2002) fi nds a signifi cant negative association between blockholding and performance in his sample of UK companies.…”

Section: Outside Blockholders and Firm Performancementioning

confidence: 83%

Firm Performance: Do Non‐Executive Directors Have Minds of their Own? Evidence from UK Panel Data

Mura

2007

Financial Management

121

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I investigate the relation between firm performance and both ownership structure and board composition. Use of the GMM methodology permits simultaneous control of both endogeneity of the independent variables and fixed effects. The data comprise an original, large, hand-collected panel dataset of UK firms for the period 1991-2001. Results indicate that the direction of causality runs from ownership and board composition to performance. I find a cubic relation between performance and ownership by executive directors. The proportion of non-executives on the board, but not their proportional ownership, is significantly and positively related to firm performance. Finally, the relation between performance and blockholdings by institutional and non-institutional owners is negative. Thus, results indicate that only non-executive directors are effective monitors. Copyright (c) 2007 Financial Management Association International.

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“…We define managerial ownership as the fraction of outstanding shares held by the officer and directors. Shleifer and Vishny (1997) argue that blockholder equity ownership is the most direct way to align cash flow and control rights of outside investors, effectively limiting management discretion and eliminating inefficiencies (Shleifer and Vishny, 1986;Shome and Singh, 1995;Allen and Phillips, 2000;Singh et al, 2004;Glaser and Müller, 2010). Thus, we expect that the investment efficiency of diversified firms is positively related to their level of blockholder ownership.…”

Section: Managerial Ownershipmentioning

confidence: 90%

Corporate governance and capital allocations of diversified firms

Chen

2012

Journal of Banking & Finance

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Firm Value and External Blockholdings

Cited by 72 publications

References 0 publications

The Impact of Corporate Governance on Closed‐end Funds

The Impact of Corporate Governance on Closed‐end Funds

Firm Performance: Do Non‐Executive Directors Have Minds of their Own? Evidence from UK Panel Data

Corporate governance and capital allocations of diversified firms

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