Determinants of Blockholder Monitoring
Following the arguments provided in the résumé of chapter 3, this chapter introduces possible determinants of blockholder monitoring that have frequently been disregarded in existing empirical studies. In general terms, a blockholder’s monitoring can be affected by the following factors: blockholder characteristics, blockholders interrelationships, the legal environment, the presence of alternative governance mechanisms, and the characteristics of the respective blockholder’s portfolio firm. The goal of the subsequent sections is to provide an overview of these factors. For each factor, the respective section summarizes the theory as well as the empirical evidence with regard to the impact of the factors on blockholder monitoring. These analyses serve as a basis for the construction of the theoretical model and the hypotheses to be developed in chapter 5. Section 4.1 focuses on the blockholder characteristics and section 4.2 on blockholder interrelationships. Since the legal environment, the presence of alternative governance mechanisms, and the firm characteristics do not constitute the focus of the present thesis, the respective factors are pooled in section 4.3. Section 4.4 constitutes the résumé.
KeywordsCorporate Governance Cash Flow Abnormal Return Family Firm Institutional Investor
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