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Title:Blockholder dispersion and firm value PDF Logo
Authors:Konijn, Sander J. J.
Kräussl, Roman
Lucas, André
Issue Date:2010
Series/Report no.:CFS Working Paper 2010/05
Abstract:This paper analyzes the impact of blockownership dispersion on firm value. Blockholdings by multiple blockholders is a widespread phenomenon in the U.S. market. It is not clear, however, whether dispersion among blockholder is preferable to having a more concentrated ownership structure. To test for the direction of the effect, we use a large dataset of U.S. firms that combines blockholder information, shareholder rights information, debt ratings, accounting information, and financial markets information. We find that a large fraction of aggregated block ownership negatively affects Tobin's Q. The negative impact is larger if blockowners are more dispersed, suggesting that a concentrated ownership structure is to be preferred on average. Results are robust to controlling for blockholder type as well as proxies for shareholder rights. Our empirical findings are also confirmed if we study the impact of ownership dispersion on firm debt ratings rather than Tobin's Q.
Subjects:Corporate Governance
Ownership Structure
Multiple Blockholders
Firm Value
Persistent Identifier of the first edition:urn:nbn:de:hebis:30-75241
Document Type:Working Paper
Appears in Collections:CFS Working Paper Series, Universität Frankfurt a. M.

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