Estimating the Effects of Large Shareholders Using a Geographic Instrument

  title={Estimating the Effects of Large Shareholders Using a Geographic Instrument},
  author={B S Becker and Henrik Cronqvist and R{\"u}diger Fahlenbrach},
  • B S Becker, Henrik Cronqvist, Rüdiger Fahlenbrach
  • Published 2008
Large shareholders may play an important role for firm performance and policies, but identifying an effect empirically presents a challenge due to the endogeneity of ownership structures. We develop and test an empirical framework which allows us to separate selection from treatment effects of large shareholders. Unlike other blockholders, individuals tend to hold blocks in public firms located close to where they reside. Using this empirical observation, we develop an instrument – the density… CONTINUE READING
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