Do small shareholders count?

Eugene Kandel, Massimo Massa*, Andrei Simonov

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

26 Scopus citations


We hypothesize that age similarity among small shareholders acts as an implicit coordinating device for their actions and, thus, could represent an indirect source of corporate governance in firms with dispersed ownership. We test this hypothesis on a sample of Swedish firms during the 1995-2000 period. Consistent with our hypothesis, we find that compared with shareholders of differing ages, same-age noncontrolling shareholders sell more aggressively following negative firm news; firms with more age-similar small shareholders are more profitable and command higher valuation; and an increase (decline) in a firm's small shareholder age similarity brings a significantly large increase (decline) in its stock price. The last effects are more pronounced in the absence of a controlling shareholder.

Original languageAmerican English
Pages (from-to)641-665
Number of pages25
JournalJournal of Financial Economics
Issue number3
StatePublished - Sep 2011


  • Corporate finance
  • Firm value
  • Managerial decision making
  • Shareholder heterogeneity


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