Trading-off Corporate Control and Personal Diversification through Capital Structure and Merger Acivity
2007 (English)In: Journal of Business Finance & Accounting, ISSN 0306-686X, E-ISSN 1468-5957, Vol. 34, no 9-10, 1470-1495 p.Article in journal (Refereed) Published
In this study we use direct estimates of the portfolio diversification of the largest shareholder in a firm to study the impact of shareholder diversification on the firm. For firms where the controlling shareholder is an individual our tests indicate that the owner-managers use debt, dual class shares and corporate control transactions (merger activity) to strategically trade off corporate control and the drawback of poor portfolio diversification. However, for firms where the controlling shareholder is an institution, our results indicate that control but not diversification is important.
Place, publisher, year, edition, pages
2007. Vol. 34, no 9-10, 1470-1495 p.
Capital structure, Controlling shareholders, Diversification, Mergers, Votes
IdentifiersURN: urn:nbn:se:uu:diva-13472DOI: 10.1111/j.1468-5957.2007.02057.xISI: 000251415600005OAI: oai:DiVA.org:uu-13472DiVA: diva2:41242