Institutional cross-holdings and their effect on acquisition decisions

• 成果类型: Article
• 署名作者: Harford, Jarrad; Jenter, Dirk; Li, Kai
• 署名单位: University of Washington; University of Washington Seattle; Stanford University; National Bureau of Economic Research; University of British Columbia
• 刊物名称: JOURNAL OF FINANCIAL ECONOMICS
• ISSN/ISSBN: 0304-405X
• DOI: 10.1016/j.jfineco.2010.08.008
• 发表日期: 2011
• 页码: 27-39
• 关键词: Cross-holdings; institutional investors; Mergers and Acquisitions; Shareholder preferences; Value-reducing acquisitions

摘要

Cross-holdings are created when a shareholder of one firm holds shares in other firms as well, and cross-holdings alter shareholder preferences over corporate decisions that affect those other firms. Prior evidence suggests that such cross-holdings explain the puzzle of why shareholders allow acquisitions that reduce the value of the bidder. Conducting a shareholder-level analysis of cross-holdings, we instead find that cross-holdings are too small to matter in most acquisitions and that bidders do not bid more aggressively even in the few cases in which cross-holdings are large. We conclude that cross-holdings do not explain value-reducing acquisitions. Beyond acquisitions, we find that institutional cross-holdings between large firms have, in fact, increased rapidly over the last 20 years, but mostly due to indexing and quasi-indexing. As in acquisitions, cross-holdings by active investors are typically too small to matter. (C) 2010 Elsevier B.V. All rights reserved.