Ownership concentration and firm risk: The moderating role of mid-sized blockholders

Silvia Rossetto, Nassima Selmane and Raffaele Staglianò

No 22-1346, TSE Working Papers from Toulouse School of Economics (TSE)

Abstract: This study analyzes the relationship between mid-sized blockholders and firm risk. We show that ownership structure matters for firm risk, beyond the first largest blockholder. Firms with multiple blockholders take more risk than firms with just one blockholder, even when controlling for the stake of the largest blockholder. Consistent with the diversification argument, we find that firm risk increases by 22% when the number of blockholders increases from one to two. Our results are robust to controlling for blockholder type and firm characteristics. We carry out various robustness checks to tackle endogeneity issues. More generally, we provide evidence that firms’ decisions are affected by mid-sized blockholders, and not merely the largest blockholder. This is in line with theoretical predictions.

Keywords: Corporate Governance; Ownership Structure; Firm Risk; Blockholders; Volatility of Operating Performance (search for similar items in EconPapers)
JEL-codes: G11 G30 G32 G34 (search for similar items in EconPapers)
Date: 2022-07-01
New Economics Papers: this item is included in nep-cfn and nep-rmg
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://www.tse-fr.eu/sites/default/files/TSE/docu ... 2022/wp_tse_1346.pdf Full Text (application/pdf)

Related works:
Journal Article: Ownership concentration and firm risk: The moderating role of mid‐sized blockholders (2023)
Working Paper: Ownership concentration and firm risk: the moderating role of mid-sized blockholders (2022)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:tse:wpaper:127065

Access Statistics for this paper

More papers in TSE Working Papers from Toulouse School of Economics (TSE) Contact information at EDIRC.
Bibliographic data for series maintained by ().