Full Citation

Title: Corporate Financial and Investment Policies in the Presence of a Blockholder on the Board

Citation Type: Journal Article

Publication Year: 2018

ISBN:

ISSN: 2010-1392

DOI: 10.1142/S201013921850012X

NSFID:

PMCID:

PMID:

Abstract: We examine the relation between the presence of an independent director who is a blockholder (IDB) and corporate policies, risk-taking, and market valuation. After accounting for endogeneity, firms with an IDB have significantly (1) lower levels of cash holdings, payout and research and development (R&D) expenditures, (2) higher levels of capital expenditures, and (3) lower risk. The market appears to value IDB presence and the associated decrease in dividend yield. About 75% of the IDBs in our sample are individual investors, who drive most of our results. Our findings suggest that IDB presence plays a valuable role in shaping some corporate policies and allocating corporate resources.

Url: http://aagrawal.people.ua.edu/uploads/9/1/7/7/91770628/idb_policy.pdf

Url: https://www.worldscientific.com/doi/abs/10.1142/S201013921850012X

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Authors: Agrawal, Anup; Nasser, Tareque

Periodical (Full): Quarterly Journal of Finance

Issue: 03

Volume: 08

Pages: 1850012

Data Collections: IPUMS NHGIS

Topics: Other

Countries: United States