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Ownership structure, Voting and Risk

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Ownership structure, Voting and Risk. / Dhillon, Amrita; Rossetto, Silvia.

In: REVIEW OF FINANCIAL STUDIES, Vol. 28, No. 2, 2015, p. 521-560.

Research output: Contribution to journalArticle

Harvard

Dhillon, A & Rossetto, S 2015, 'Ownership structure, Voting and Risk', REVIEW OF FINANCIAL STUDIES, vol. 28, no. 2, pp. 521-560. https://doi.org/10.1093/rfs/hhu071

APA

Dhillon, A., & Rossetto, S. (2015). Ownership structure, Voting and Risk. REVIEW OF FINANCIAL STUDIES, 28(2), 521-560. https://doi.org/10.1093/rfs/hhu071

Vancouver

Dhillon A, Rossetto S. Ownership structure, Voting and Risk. REVIEW OF FINANCIAL STUDIES. 2015;28(2):521-560. https://doi.org/10.1093/rfs/hhu071

Author

Dhillon, Amrita ; Rossetto, Silvia. / Ownership structure, Voting and Risk. In: REVIEW OF FINANCIAL STUDIES. 2015 ; Vol. 28, No. 2. pp. 521-560.

Bibtex Download

@article{c570bd99f62543a8949cd8a726a91ac1,
title = "Ownership structure, Voting and Risk",
abstract = "We analyze the determinants of a firm's ownership structure whenshareholders' preferences over the firm's risk exposure depend on the sizeof their stake. Large shareholders may then prefer less risky investmentscompared to small, well diversified shareholders. We assume that decisionsover risk exposure are taken by a shareholder vote and that only a fraction ofthe small shareholders participate in that vote. We show that mid-sizedblockholders may emerge in this case so as to mitigate the conflict ofinterest between one large and many small shareholders. The paper thusoffers a novel explanation for the puzzling observation that many firms havemultiple blockholders, with no apparent governance role suggested by thetheoretical literature. The paper also develops numerous empiricalimplications, for example about the relative size of blocks in firms withmultiple blockholders.",
author = "Amrita Dhillon and Silvia Rossetto",
year = "2015",
doi = "10.1093/rfs/hhu071",
language = "English",
volume = "28",
pages = "521--560",
journal = "REVIEW OF FINANCIAL STUDIES",
issn = "0893-9454",
publisher = "Oxford University Press",
number = "2",

}

RIS (suitable for import to EndNote) Download

TY - JOUR

T1 - Ownership structure, Voting and Risk

AU - Dhillon, Amrita

AU - Rossetto, Silvia

PY - 2015

Y1 - 2015

N2 - We analyze the determinants of a firm's ownership structure whenshareholders' preferences over the firm's risk exposure depend on the sizeof their stake. Large shareholders may then prefer less risky investmentscompared to small, well diversified shareholders. We assume that decisionsover risk exposure are taken by a shareholder vote and that only a fraction ofthe small shareholders participate in that vote. We show that mid-sizedblockholders may emerge in this case so as to mitigate the conflict ofinterest between one large and many small shareholders. The paper thusoffers a novel explanation for the puzzling observation that many firms havemultiple blockholders, with no apparent governance role suggested by thetheoretical literature. The paper also develops numerous empiricalimplications, for example about the relative size of blocks in firms withmultiple blockholders.

AB - We analyze the determinants of a firm's ownership structure whenshareholders' preferences over the firm's risk exposure depend on the sizeof their stake. Large shareholders may then prefer less risky investmentscompared to small, well diversified shareholders. We assume that decisionsover risk exposure are taken by a shareholder vote and that only a fraction ofthe small shareholders participate in that vote. We show that mid-sizedblockholders may emerge in this case so as to mitigate the conflict ofinterest between one large and many small shareholders. The paper thusoffers a novel explanation for the puzzling observation that many firms havemultiple blockholders, with no apparent governance role suggested by thetheoretical literature. The paper also develops numerous empiricalimplications, for example about the relative size of blocks in firms withmultiple blockholders.

U2 - 10.1093/rfs/hhu071

DO - 10.1093/rfs/hhu071

M3 - Article

VL - 28

SP - 521

EP - 560

JO - REVIEW OF FINANCIAL STUDIES

JF - REVIEW OF FINANCIAL STUDIES

SN - 0893-9454

IS - 2

ER -

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