Estimating the effects of large shareholders using a geographic instrument
By: Bo Becker, Henrik Cronqvist, Rüdiger Fahlenbrach
Contributors: Cronqvist, Henrik; Fahlenbrach, Rüdiger; Harvard Business School
Series: Working paper / Harvard Business School -- 10-028; Working paper (Harvard Business School) -- 10-028.
Publisher: Harvard Business School
Published: 2009
Place of publication: [Boston]
Language: eng
Number of pages: 57
Description: 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: "October 2009"--Publisher's website.

Includes bibliographical references.