Institutional investor cliques and governance

• 成果类型: Article
• 署名作者: Crane, Alan D.; Koch, Andrew; Michenaud, Sebastien
• 署名单位: Rice University; Pennsylvania Commonwealth System of Higher Education (PCSHE); University of Pittsburgh; DePaul University
• 刊物名称: JOURNAL OF FINANCIAL ECONOMICS
• ISSN/ISSBN: 0304-405X
• DOI: 10.1016/j.jfineco.2018.11.012
• 发表日期: 2019
• 页码: 175-197
• 关键词: INSTITUTIONAL OWNERSHIP; governance; COORDINATION; EXIT; VOICE

摘要

We examine the impact of investor coordination on governance. We identify coordinating groups of investors (cliques) as those connected through the network of institutional holdings. Clique members vote together on proxy items: a one standard deviation increase in clique ownership more than doubles votes against low quality management proposals. We use the 2003 mutual fund trading scandal to show that this effect is causal. These findings suggest coordination strengthens governance via voice. Coordination, however, also weakens governance via threat of exit. Clique owners exit positions more slowly, and firm value responds negatively to liquidity shocks when clique ownership is high. (C) 2018 Published by Elsevier B.V.