BLOCKHOLDER INTERVENTION VERSUS THREAT OF EXIT
The role of blockholders on the register constitutes a significant puzzle. Concentrated blockholders could intervene (i.e., exercise “voice) so as to improve firm governance mechanisms. Alternatively, in theory at least, the presence of many blockholders could effectively discipline management if blockholders adopt the “Wall Street walk (Edmans and Manso (2008)). Utilizing unique daily blockholder trading data, we obtain a number of significant results: (i) a sizeable portion of blockholder trading takes the form of “stock churning; (ii) churning is profitable and, moreover, (iii) profitability diminishes in the number of blockholders—blockholders are thus informed and in receipt of a common signal; (iv) pricing efficiency is increasing in the number of blockholders trading simultaneously; (v) both the number of blockholders trading simultaneously and magnitude of the swings in these churning trades significantly improve long-term firm performance; (vi) when stock-overweight and concentrated blockholders do not churn there is no long-term effect; and (vii) blockholders seem to recognize the benefits of managerial discipline since stockholdings increase with churning activity. Thus we find that the “threat of exit speaks more authoritatively than “voice.
Exit Voting with your feet Wall Street walk Churning Governance
David R. Gallagher Peter A. Gardner Peter L. Swan
Australian School of Business, The University of New South Wales, Sydney NSW 2052, AUSTRALIA McCombs Australian School of Business, The University of New South Wales, Sydney NSW 2052, AUSTRALIA Plato I Australian School of Business, The University of New South Wales, Sydney NSW 2052, AUSTRALIA
国际会议
广州
英文
1-45
2009-07-07（万方平台首次上网日期，不代表论文的发表时间）