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Blockholder Heterogeneity, Multiple Blocks, and the Dance between Blockholders

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  • Charles J Hadlock
  • Miriam Schwartz-Ziv

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.

Suggested Citation

  • Charles J Hadlock & Miriam Schwartz-Ziv, 2019. "Blockholder Heterogeneity, Multiple Blocks, and the Dance between Blockholders," The Review of Financial Studies, Society for Financial Studies, vol. 32(11), pages 4196-4227.
    • Handle: RePEc:oup:rfinst:v:32:y:2019:i:11:p:4196-4227.
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    File URL: http://hdl.handle.net/10.1093/rfs/hhz022
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    Cited by:

    1. Chen, Kejing & Jiang, Lin & Kang, Yanling & Yang, Mo & Zhen, Jiahua, 2024. "Blockholder exit threats and excess executive perks," International Review of Economics & Finance, Elsevier, vol. 93(PA), pages 80-97.
    2. Nuria Boot & Jo Seldeslachts & Albert Banal Estañol, 2022. "Common ownership: Europe vs. the US," Working Papers of Department of Management, Strategy and Innovation, Leuven 700180, KU Leuven, Faculty of Economics and Business (FEB), Department of Management, Strategy and Innovation, Leuven.
    3. Jonathan Taglialatela & Roberto Barontini & Francesco Testa & Fabio Iraldo, 2024. "Blockholders and the ESG performance of M&A targets," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 28(2), pages 625-650, June.

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