Estimating the Effects of Large Shareholders Using a Geographic Instrument / Bo Becker, Henrik Cronqvist, Rüdiger Fahlenbrach.

Format:

Book

Author/Creator:

Becker, Bo.

Contributor:

National Bureau of Economic Research.

Cronqvist, Henrik.

Fahlenbrach, Rüdiger.

Series:

Working Paper Series (National Bureau of Economic Research) no. w17393.

NBER working paper series no. w17393

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2011.

Summary:

Large shareholders may play an important role for firm performance and policies, but identifying this empirically presents a challenge due to the endogeneity of ownership structures. We develop and test an empirical framework which allows us to separate selection from treatment effects of large shareholders. Individual blockholders tend to hold blocks in public firms located close to where they reside. Using this empirical observation, we develop an instrument - the density of wealthy individuals near a firm's headquarters - for the presence of a large, non-managerial individual shareholder in a firm. These shareholders have a large impact on firms, controlling for selection effects.

Notes:

Print version record

September 2011.