Blockholder Heterogeneity, Multiple Blocks, and the Dance between Blockholders

Charles Hadlock; Miriam Schwartz-Ziv

doi:10.1093/rfs/hhz022

Blockholder Heterogeneity, Multiple Blocks, and the Dance between Blockholders

Charles Hadlock, Miriam Schwartz-Ziv^*

^*Corresponding author for this work

Business Administration

Research output: Contribution to journal › Article › peer-review

12 Scopus citations

Abstract

We study blockholder presence in a large panel and document substantial heterogeneity in holding periods, position sizes, and positions taken across blockholder types. Nonfinancial blocks are more likely to be observed in smaller, riskier, younger, and less-liquid firms. These patterns are either not evident or reversed for financial blocks. For all but small financial blocks, we detect significant negative interdependence in blockholder investment decisions, with the presence of one blockholder crowding out others, a behavior that appears causal. Small financial blocks often coexist in the same firm, an outcome that appears to reflect correlated investment styles. Received April 30, 2018; editorial decision November 23, 2018 by Editor David Denis.

Original language	American English
Pages (from-to)	4196-4227
Number of pages	32
Journal	Review of Financial Studies
Volume	32
Issue number	11
DOIs	https://doi.org/10.1093/rfs/hhz022
State	Published - 1 Nov 2019

Bibliographical note

Funding Information:
We thank Damien Brooks for superb research assistance and Nicole Boyson, Elizabeth Cooperman, David Denis (the editor), Alex Edmans, Radha Gopalan, Doron Levit, Sebastien Michenaud, Marco Pagano, Lea Stern, and Francisco Urzúa I.; an anonymous referee; and seminar participants at Hebrew University of Jerusalem, IDC Herzliya, Illinois, Northeastern, Tel Aviv University, Tennessee, Texas, Toronto, Washington University in St. Louis, Wayne State, the 2015 Drexel Conference on Corporate Governance, the 2016 International Risk Management Conference, the 2017 Midwest Finance Association meetings, the 2017 European Finance Association meetings, the 2017 FMA meetings, the 2018 Colorado Front Range conference, and the 2018 CEIBS conference for helpful comments. M. S.-Z. thanks Harvard University for data access as a visiting scholar, and C. J. H. acknowledges the research support of the University of Chicago as a visiting professor. All errors remain our own. Send correspondence to Miriam Schwartz-Ziv, Finance department, Hebrew University, Mount Scopus, Jerusalem, 91905, Israel; telephone: +972-2-588-3235. Email: miriam.schwartz@mail.huji.ac.il.

Publisher Copyright:
© 2019 The Author(s).

Access to Document

10.1093/rfs/hhz022

Cite this

@article{77d6c813cae44bdcb91a2edf39e8838d,

title = "Blockholder Heterogeneity, Multiple Blocks, and the Dance between Blockholders",

abstract = "We study blockholder presence in a large panel and document substantial heterogeneity in holding periods, position sizes, and positions taken across blockholder types. Nonfinancial blocks are more likely to be observed in smaller, riskier, younger, and less-liquid firms. These patterns are either not evident or reversed for financial blocks. For all but small financial blocks, we detect significant negative interdependence in blockholder investment decisions, with the presence of one blockholder crowding out others, a behavior that appears causal. Small financial blocks often coexist in the same firm, an outcome that appears to reflect correlated investment styles. Received April 30, 2018; editorial decision November 23, 2018 by Editor David Denis.",

author = "Charles Hadlock and Miriam Schwartz-Ziv",

note = "Funding Information: We thank Damien Brooks for superb research assistance and Nicole Boyson, Elizabeth Cooperman, David Denis (the editor), Alex Edmans, Radha Gopalan, Doron Levit, Sebastien Michenaud, Marco Pagano, Lea Stern, and Francisco Urz{\'u}a I.; an anonymous referee; and seminar participants at Hebrew University of Jerusalem, IDC Herzliya, Illinois, Northeastern, Tel Aviv University, Tennessee, Texas, Toronto, Washington University in St. Louis, Wayne State, the 2015 Drexel Conference on Corporate Governance, the 2016 International Risk Management Conference, the 2017 Midwest Finance Association meetings, the 2017 European Finance Association meetings, the 2017 FMA meetings, the 2018 Colorado Front Range conference, and the 2018 CEIBS conference for helpful comments. M. S.-Z. thanks Harvard University for data access as a visiting scholar, and C. J. H. acknowledges the research support of the University of Chicago as a visiting professor. All errors remain our own. Send correspondence to Miriam Schwartz-Ziv, Finance department, Hebrew University, Mount Scopus, Jerusalem, 91905, Israel; telephone: +972-2-588-3235. Email: miriam.schwartz@mail.huji.ac.il. Publisher Copyright: {\textcopyright} 2019 The Author(s).",

year = "2019",

month = nov,

day = "1",

doi = "10.1093/rfs/hhz022",

language = "American English",

volume = "32",

pages = "4196--4227",

journal = "Review of Financial Studies",

issn = "0893-9454",

publisher = "Oxford University Press",

number = "11",

}

TY - JOUR

T1 - Blockholder Heterogeneity, Multiple Blocks, and the Dance between Blockholders

AU - Hadlock, Charles

AU - Schwartz-Ziv, Miriam

N1 - Funding Information: We thank Damien Brooks for superb research assistance and Nicole Boyson, Elizabeth Cooperman, David Denis (the editor), Alex Edmans, Radha Gopalan, Doron Levit, Sebastien Michenaud, Marco Pagano, Lea Stern, and Francisco Urzúa I.; an anonymous referee; and seminar participants at Hebrew University of Jerusalem, IDC Herzliya, Illinois, Northeastern, Tel Aviv University, Tennessee, Texas, Toronto, Washington University in St. Louis, Wayne State, the 2015 Drexel Conference on Corporate Governance, the 2016 International Risk Management Conference, the 2017 Midwest Finance Association meetings, the 2017 European Finance Association meetings, the 2017 FMA meetings, the 2018 Colorado Front Range conference, and the 2018 CEIBS conference for helpful comments. M. S.-Z. thanks Harvard University for data access as a visiting scholar, and C. J. H. acknowledges the research support of the University of Chicago as a visiting professor. All errors remain our own. Send correspondence to Miriam Schwartz-Ziv, Finance department, Hebrew University, Mount Scopus, Jerusalem, 91905, Israel; telephone: +972-2-588-3235. Email: miriam.schwartz@mail.huji.ac.il. Publisher Copyright: © 2019 The Author(s).

PY - 2019/11/1

Y1 - 2019/11/1

N2 - We study blockholder presence in a large panel and document substantial heterogeneity in holding periods, position sizes, and positions taken across blockholder types. Nonfinancial blocks are more likely to be observed in smaller, riskier, younger, and less-liquid firms. These patterns are either not evident or reversed for financial blocks. For all but small financial blocks, we detect significant negative interdependence in blockholder investment decisions, with the presence of one blockholder crowding out others, a behavior that appears causal. Small financial blocks often coexist in the same firm, an outcome that appears to reflect correlated investment styles. Received April 30, 2018; editorial decision November 23, 2018 by Editor David Denis.

AB - We study blockholder presence in a large panel and document substantial heterogeneity in holding periods, position sizes, and positions taken across blockholder types. Nonfinancial blocks are more likely to be observed in smaller, riskier, younger, and less-liquid firms. These patterns are either not evident or reversed for financial blocks. For all but small financial blocks, we detect significant negative interdependence in blockholder investment decisions, with the presence of one blockholder crowding out others, a behavior that appears causal. Small financial blocks often coexist in the same firm, an outcome that appears to reflect correlated investment styles. Received April 30, 2018; editorial decision November 23, 2018 by Editor David Denis.

UR - http://www.scopus.com/inward/record.url?scp=85074908927&partnerID=8YFLogxK

U2 - 10.1093/rfs/hhz022

DO - 10.1093/rfs/hhz022

M3 - Article

AN - SCOPUS:85074908927

SN - 0893-9454

VL - 32

SP - 4196

EP - 4227

JO - Review of Financial Studies

JF - Review of Financial Studies

IS - 11

ER -

Blockholder Heterogeneity, Multiple Blocks, and the Dance between Blockholders

Abstract

Bibliographical note

Access to Document

Other files and links

Fingerprint

Cite this