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Corporate Blockholders and Leverage

Bui, Thuy (2017) Corporate Blockholders and Leverage. Doctoral Dissertation, University of Pittsburgh. (Unpublished)

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This paper investigates the relationship between corporate block ownership and firm leverage. Corporate blockholders – nonfinancial firms who hold more than five percent equity in another industrial corporation − can affect a firm’s policies through their business relationships, monitoring, or through expropriation. By examining the evolution of corporate block ownership after block formation, I find that corporate block ownership is negatively related to firm leverage in fixed-effects and dynamic GMM regressions. In addition, corporate blockholders often obtain board seats, indicating that corporate investors are actively involved in governance activities. Furthermore, the negative relationship between corporate blocks and leverage becomes stronger when corporate blockholders have more board representation on the target firm, when the firm has higher agency costs, and when there is no product market relationship between corporate blockholders and the firm. Overall, my findings suggest that corporate blockholders play an important monitoring role in firm policies and can substitute for other monitoring mechanisms including leverage and institutional investors.


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Item Type: University of Pittsburgh ETD
Status: Unpublished
CreatorsEmailPitt UsernameORCID
Bui, Thuythb33@pitt.eduTHB33
ETD Committee:
TitleMemberEmail AddressPitt UsernameORCID
Committee ChairDenis,
Committee MemberDenis,
Committee MemberThomas,
Committee MemberWaller,
Date: 28 September 2017
Date Type: Publication
Defense Date: 4 August 2017
Approval Date: 28 September 2017
Submission Date: 18 August 2017
Access Restriction: No restriction; Release the ETD for access worldwide immediately.
Number of Pages: 71
Institution: University of Pittsburgh
Schools and Programs: Joseph M. Katz Graduate School of Business > Business Administration
Degree: PhD - Doctor of Philosophy
Thesis Type: Doctoral Dissertation
Refereed: Yes
Uncontrolled Keywords: leverage, debt, capital structure, blockholders, governance, agency, corporate blockholders
Date Deposited: 28 Sep 2017 15:33
Last Modified: 28 Sep 2017 15:33


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