Owners' Portfolio Diversification and Firm Investment

• 成果类型: Article
• 署名作者: Lyandres, Evgeny; Marchica, Maria-Teresa; Michaely, Roni; Mura, Roberto
• 署名单位: Boston University; University of Manchester; Alliance Manchester Business School; University of Geneva
• 刊物名称: REVIEW OF FINANCIAL STUDIES
• ISSN/ISSBN: 0893-9454
• DOI: 10.1093/rfs/hhz050
• 发表日期: 2019
• 页码: 4855
• 关键词: free cash flow; SHAREHOLDER DIVERSIFICATION; corporate governance; FAMILY CONTROL; AGENCY COSTS; INFORMATION; RISK; performance; returns; price

摘要

Portfolio diversification of firms' controlling owners influences their firms' capital investment. Empirically, the effect of owners' portfolio diversification on their firms' investment levels is positive for publicly traded firms and tends to be negative for privately held ones. These findings are consistent with predictions of a model in which a risk-averse investor simultaneously chooses her portfolio structure, and both the level and riskiness of capital investment of the firm she controls, and in which the firm can be potentially constrained in its capital investment choices. Overall, our results indicate that owners' portfolio underdiversification and firms' financial constraints can affect firms' resource allocation.