The Wall Street Walk when Blockholders Compete for Flows

• 成果类型: Article
• 署名作者: Dasgupta, Amil; Piacentino, Giorgia
• 署名单位: University of London; London School Economics & Political Science; Center for Economic & Policy Research (CEPR); University of London; London Business School; Washington University (WUSTL)
• 刊物名称: JOURNAL OF FINANCE
• ISSN/ISSBN: 0022-1082
• DOI: 10.1111/jofi.12308
• 发表日期: 2015
• 页码: 2853-2896
• 关键词: SHAREHOLDER ACTIVISM; managerial incentives; corporate governance; career concerns; Hedge funds; OWNERSHIP; liquidity; IMPACT; feet

摘要

Effective monitoring by equity blockholders is important for good corporate governance. A prominent theoretical literature argues that the threat of block sale (exit) can be an effective governance mechanism. Many blockholders are money managers. We show that, when money managers compete for investor capital, the threat of exit loses credibility, weakening its governance role. Money managers with more skin in the game will govern more successfully using exit. Allowing funds to engage in activist measures (voice) does not alter our qualitative results. Our results link widely prevalent incentives in the ever-expanding money management industry to the nature of corporate governance.