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Title: Are institutional investors with multiple blockholdings effective monitors?
Authors: Kang, Jun-Koo
Luo, Juan
Na, Hyun Seung
Keywords: Institutional Investors
Corporate Governance
Issue Date: 2018
Source: Kang, J.-K., Luo, J., & Na, H. S. (2018). Are institutional investors with multiple blockholdings effective monitors?. Journal of Financial Economics, 128(3), 576-602. doi:10.1016/j.jfineco.2018.03.005
Series/Report no.: Journal of Financial Economics
Abstract: We examine whether institutions’ monitoring effectiveness is related to the number of their blockholdings. We find that the number of blocks that a firm's large institutions hold is positively associated with forced chief executive officer (CEO) turnover-performance sensitivity, abnormal returns around forced CEO turnover announcements and 13D filings, and changes in firm value. These results are particularly evident when institutions have multiple blockholdings in the same industry, when they have activism experience, or when they have long-term blockholdings in their portfolio firms. Our results suggest that information advantages and governance experience obtained from multiple blockholdings are important channels through which institutions perform effective monitoring.
ISSN: 0304-405X
DOI: 10.1016/j.jfineco.2018.03.005
Rights: © 2018 Elsevier B. V. All rights reserved. This paper was published in Journal of Financial Economics and is made available with permission of Elsevier B. V.
Fulltext Permission: open
Fulltext Availability: With Fulltext
Appears in Collections:NBS Journal Articles

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