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Shareholder Perks and Firm Value
[Matching on the Estimated Propensity Score]

Author

Listed:
  • Jonathan M Karpoff
  • Robert Schonlau
  • Katsushi Suzuki

Abstract

Shareholder perks are in-kind gifts or purchase discounts that disproportionately reward small shareholders. Data from Japanese firms indicate that firms initiating perk programs attract individual retail shareholders and experience increases in share values. We find support for three channels by which perks increase firm value: an increase in share liquidity, a decrease in the equity cost of capital, and signaling to investors. A fourth channel, by which perks help to market the firm’s products to consumers, receives mixed support. We do not find evidence that perk programs work to entrench managers.

Suggested Citation

  • Jonathan M Karpoff & Robert Schonlau & Katsushi Suzuki, 2021. "Shareholder Perks and Firm Value [Matching on the Estimated Propensity Score]," The Review of Financial Studies, Society for Financial Studies, vol. 34(12), pages 5676-5722.
    • Handle: RePEc:oup:rfinst:v:34:y:2021:i:12:p:5676-5722.
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    File URL: http://hdl.handle.net/10.1093/rfs/hhaa141
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    Citations

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    Cited by:

    1. Liu, Qingfu & Shi, Chen & Tse, Yiuman & Wang, Chuanjie, 2023. "The value of communication during pandemics," Pacific-Basin Finance Journal, Elsevier, vol. 82(C).
    2. Huang, Wei & Rhee, S. Ghon & Suzuki, Katsushi & Yasutake, Taeko, 2022. "Do investors value shareholder perks? Evidence from Japan," Journal of Banking & Finance, Elsevier, vol. 143(C).

    More about this item

    JEL classification:

    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • G35 - Financial Economics - - Corporate Finance and Governance - - - Payout Policy
    • M30 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Marketing and Advertising - - - General

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