Blockholder Trading, Market Efficiency, and Managerial Myopia

• 成果类型: Article
• 署名作者: Edmans, Alex
• 署名单位: University of Pennsylvania
• 刊物名称: JOURNAL OF FINANCE
• ISSN/ISSBN: 0022-1082
• DOI: 10.1111/j.1540-6261.2009.01508.x
• 发表日期: 2009
• 页码: 2481-2513
• 关键词: institutional investors; Ownership structure; large shareholders; corporate-control; stock returns; INFORMATION; liquidity; INVESTMENT; COSTS; incentives

摘要

This paper analyzes how blockholders can exert governance even if they cannot intervene in a firm's operations. Blockholders have strong incentives to monitor the firm's fundamental value because they can sell their stakes upon negative information. By trading on private information (following the Wall Street Rule), they cause prices to reflect fundamental value rather than current earnings. This in turn encourages managers to invest for long-run growth rather than short-term profits. Contrary to the view that the U.S.'s liquid markets and transient shareholders exacerbate myopia, I show that they can encourage investment by impounding its effects into prices.