Conflicts of Interests Among Shareholders: The Case of Corporate Acquisitions
We identify important conflicts of interests among shareholders and examine their effects on corporate decisions. When a firm is considering an action that affects other firms in its shareholders portfolios,its shareholders will disagree about whether to proceed,based on heterogeneity in their portfolio holdings. This effect is large and measurable in the case of mergers and acquisitions,where the cross-holdings of bidder shareholders are theoretically comparable to direct toeholds. In this context we find that these cross-holdings are economically large for a significant group of shareholders in the average transaction. However,managers are compensated to behave as if they are a concentrated shareholder in their own company. We test whether cross-holding shareholders have influence over management in structuring deals and find that managers effectively ignore their shareholders portfolio concerns and behave as if the cross-holdings do not exist.
cross-holdings shareholder heterogeneity agency conflict mergers and acquisitions toehold
Jarrad Harford Dirk Jenter Kai Li
University of Washington Business School,Box 353200,Seattle,WA 98195-3200,206.543.4796 Sloan School of Management and NBER,Massachusetts Institute of Technology,E52-446,Cambridge,MA 02142 Sauder School of Business,University of British Columbia,2053Main Mall,Vancouver,BC V6T 1Z2,604.822.
国际会议
成都
英文
2007-07-09（万方平台首次上网日期，不代表论文的发表时间）