Research and articles
An encyclopaedia on blockholders (large shareholders) and their effects on firm performance
Edmans and Holderness (2017): “Blockholders: A Survey of Theory and Evidence”
Handbook of Economics of Corporate Governance
- How common are blockholders and how large are their stakes? How do we even define a large shareholder – by their £ stake, their % stake, or something else?
- Who are blockholders? Are they individuals, mutual funds, other companies? Do they have seats on the board? Are blockholders more common in young versus old firms, large versus small firms, well- versus poorly-performing firms, and so on?
- How do blockholders exert governance? It analyses governance through “voice” (also known as engagement, activism, or intervention) and “exit” (also known as divestment, trading, or voting with your feet)
- Is there evidence that these governance mechanisms actually work? Do blockholders improve firm performance?
- Do blockholders engage collectively with each other?
- What are the questions that we don’t yet know the answers to, which would be worth exploring in future research?
How common are large shareholders?
Holderness (2009): “The Myth of Diffuse Ownership In the United States”
Review of Financial Studies
- Uses unique, hand-collected data to show that blockholders are much more prevalent in the US than commonly believed. 96% of firms have blockholders (defined as a 5% shareholder)
- Documents the prevalence of blockholders around the world. The UK has significantly fewer blockholders than other countries
- The Answer to Short-Termism Isn’t Asking Investors to Be Patient (Alex Edmans)
- What matters for effective shareholder governance is the size of a shareholder’s stake, not its holding period
- Better Shareholder Stewardship Is the Key To Greater Productivity (David Walker)
- The role of large, engaged shareholders in improving investor stewardship, and in turn, firm performance
- Proposes surveying board chairs on the stewardship performance of their main investors