Are institutional investors with multiple blockholdings effective monitors?

• 成果类型: Article
• 署名作者: Kang, Jun-Koo; Luo, Juan; Na, Hyun Seung
• 署名单位: Nanyang Technological University; University of Adelaide; Korea University
• 刊物名称: JOURNAL OF FINANCIAL ECONOMICS
• ISSN/ISSBN: 0304-405X
• DOI: 10.1016/j.jfineco.2018.03.005
• 发表日期: 2018
• 页码: 576-602
• 关键词: CORPORATE GOVERNANCE; institutional investors; Multiple blockholdings; monitoring; experience

摘要

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. (C) 2018 Elsevier B.V. All rights reserved.