We find a significant hump-shaped relation between firm valuation and CEO ownership when external governance (EG) is weak, but the relation is insignificant when EG is strong. These interactive effects are identified while controlling for firm-fixed effects. The results imply that CEO ownership...

I show that private equity transactions (i) illustrate market-driven reactions to inefficient equity markets that result from the diffusion of equity ownership in the public firm and (ii) form part of a larger market trend to-wards the market oriented blockholder model – a hybrid ownership...

Previous studies offer evidence that foreign investors invest less money in countries or firms with weak corporate governance structures (Aggarwal et al. 2005; Dahlquist et al. 2003; Kim et al. 2010; Leuz et al. 2009). Investigating Japanese companies that go public during the 1997-2002 period, we find that...

We study the role of pyramidal ownership structures in the creation of new firms. Our results suggest that pyramids arise because they provide a financing advantage in setting up new firms when the pledgeability of cash flows to outside financiers is limited. Parent companies supply inside funds...

Using a 2004 Chinese securities regulation that requires equity offering proposals to obtain the separate approval of voting minority shareholders, we examine whether giving minority shareholders increased control over corporate decisions helps reduce value-decreasing corporate decisions for...

We present empirical evidence that firms inflate earnings around seasoned equity offerings in the presence of large outsider blockholdings, but not in their absence. The finding is robust to several alternative explanations, including differences in firm characteristics, growth, performance, CEO...

We investigate 218 Related Party Transactions (RPTs) in Israel, an economy characterized by a high percentage of closely held firms, and identify a non-linear inverted U connection between the value effect of RPT and the level of firm ownership concentration. This non-linear connection is...

This paper analyzes the interaction between shareholder structures and the quality of the corporate governance structure in France using the value creation criterion. Using shareholder structures allows to analyze the performance of French firms and to measure an underperformance of “hard...

This paper analyzes the interaction between shareholder structures and the quality of the corporate governance structure in France using the value creation criterion. Using shareholder structures allows analyzing the performance of French firms and to measure an underperformance of “hard...

Diffuse share ownership is not as pronounced in the U.S. as many would assume. This has led to a body of research examining large shareholders, or blockholders. Issues addressed include whether firms with a blockholder perform better or worse than widely-held firms; whether firms with a...