Following Zwiebel (1995) and Zingales (1995) the block premium is related to the share of total control rents which is being transferred through a block transaction relative to the share of control rents enjoyed by the market. The former share is measured by the difference in the seller's (the...

Suppose the value of a firm is endogenously determined by a manager's costly effort. We call this manager a distinguished player if he also can trade shares of the firm on a market. Arbitrage-free asset pricing theory suggests that the equilibrium market price reflects the value increasing...

In this study, we propose our hypothesis that the distinguishable principal-agent relationships of German banks are significantly influencing the risk-taking attitudes of bank managers. Particularly, we intend to substantiate the theory that banks owned by dispersed shareholders or federal state...

We analyze one frequently used clause in public bonds called covenant defeasance. Covenant defeasance allows the bond issuer to remove all of the bond's covenants by placing the remaining outstanding payments with a trustee in an escrow account to be paid out on schedule. Bond covenants are...

According to Arrow and Lind (1970), the more shareholders participate in an investment and the more dispersed the ownership structure becomes, the lower the discount rate of an individual investor is due to risk sharing. This implies that the valuation of the investment should increase....

This project focuses on the effects of ownership structures on the liquidity of the stock market in a context of low protection for minority shareholders and large ownership concentration. The ultimate defense strategy of an expropriated investor is to exit the position, provided that a market...

This study examines whether the flow volatility experienced by institutional investors affects firms' financing costs. Using Greenwood and Thesmar's (2011) stock price fragility, a proxy for firm exposure to its institutional investors' flow volatility, we find that firms with high stock price...

We develop a dynamic equilibrium model to derive testable time-series and cross-sectional implications for the endogenous relations among ownership concentration, managerial incentives, and asset prices. For a given firm at any date, ownership concentration is positively related to managerial...

Empirical evidence suggests that investor protection has significant effects on ownership concentration and asset prices. We develop a dynamic asset pricing model to address the empirical regularities and uncover some of the underlying mechanisms at play. Our model features a controlling...