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Does stable ownership create value? Evidence from the global financial crisis

Andy Lardon, Christof Beuselinck and Marc Deloof
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Marc Deloof: Antwerp Management School

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Abstract: We investigate the value of stable ownership for a sample of European firms using the global financial crisis as an exogenous shock and pre-and post-crisis years as benchmark periods. Consistent with the argument that stable ownership allows managers to focus on the creation of long-term value, we find that stable ownership resulted in higher stock returns and a higher market-to-book ratio during the crisis. This positive effect of stable ownership was not reversed after the crisis. Stable institutional blockholdings were more valuable in countries with weaker investor protection. However, the positive effect does not apply to firms in which a family is the largest blockholder. Finally, we also find that ownership stability was associated with a higher level of investments, illustrating that stable ownership affects real corporate decisions.

Keywords: Ownership stability; Family ownership; Institutional ownership; Global financial crisis; Firm value; Investments (search for similar items in EconPapers)
Date: 2019-02
Note: View the original document on HAL open archive server: https://hal.archives-ouvertes.fr/hal-02111442
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Published in Review of Quantitative Finance and Accounting, Springer Verlag, 2019, 52 (2), pp.573-642. ⟨10.1007/s11156-018-0719-4⟩

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-02111442

DOI: 10.1007/s11156-018-0719-4

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