This paper investigates interactions between two central corporate governance mechanisms: shareholder rights and managerial ownership. I find that the effect of managerial ownership on firm value crucially depends on shareholder rights. Managerial ownership enhances firm value when shareholder...

Ease of coordination can enable diffuse shareholders to play a more effective role in corporate governance and thereby increase firm value. Using geographical proximity and correlation in portfolio allocation decisions as proxies for the ease of coordination, I find evidence that ease of...