Document de travail

Ownership concentration and firm risk: The moderating role of mid-sized blockholders

Silvia Rossetto, Nassima Selmane et Raffaele Staglianò

Résumé

This study analyzes the relationship between mid-sized blockholders and firm risk. We show that ownership structure matters for firm risk, beyond the first largest blockholder. Firms with multiple blockholders take more risk than firms with just one blockholder, even when controlling for the stake of the largest blockholder. Consistent with the diversification argument, we find that firm risk increases by 22% when the number of blockholders increases from one to two. Our results are robust to controlling for blockholder type and firm characteristics. We carry out various robustness checks to tackle endogeneity issues. More generally, we provide evidence that firms’ decisions are affected by mid-sized blockholders, and not merely the largest blockholder. This is in line with theoretical predictions.

Mots-clés

Corporate Governance; Ownership Structure; Firm Risk; Blockholders; Volatility of Operating Performance;

Codes JEL

  • G11: Portfolio Choice • Investment Decisions
  • G30: General
  • G32: Financing Policy • Financial Risk and Risk Management • Capital and Ownership Structure • Value of Firms • Goodwill
  • G34: Mergers • Acquisitions • Restructuring • Corporate Governance

Remplacé par

Silvia Rossetto, Nassima Selmane et Raffaele Staglianò, « Ownership concentration and firm risk: The moderating role of mid-sized blockholders », Journal of Business Finance and Accounting, 2022, à paraître.

Référence

Silvia Rossetto, Nassima Selmane et Raffaele Staglianò, « Ownership concentration and firm risk: The moderating role of mid-sized blockholders », TSE Working Paper, n° 22-1346, juin 2022.

Voir aussi

Publié dans

TSE Working Paper, n° 22-1346, juin 2022