The wall street stampede: exit as governance with interacting blockholders
Cvijanović, D., Dasgupta, A.
& Zachariadis, K.
(2022).
The wall street stampede: exit as governance with interacting blockholders.
Journal of Financial Economics,
144(2), 433-455.
https://doi.org/10.1016/j.jfineco.2022.02.005
& Zachariadis, K.
(2022).
The wall street stampede: exit as governance with interacting blockholders.
Journal of Financial Economics,
144(2), 433-455.
https://doi.org/10.1016/j.jfineco.2022.02.005
The growth of the asset management industry has made it commonplace for firms to have multiple institutional blockholders. In such firms, the strength of governance via exit depends on how blockholders react to each other's exit. We present a model to show that open-ended institutional investors such as mutual funds react strongly to an informed blockholder's exit, leading to correlated exits that enhance corporate governance. Our analysis points to a new role for mutual funds in corporate governance. We examine the trades of mutual funds around exits by activist hedge funds to present empirical evidence consistent with our model.
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- G23 - Pension Funds; Other Private Financial Institutions
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Dasgupta, A. & Zachariadis, K.
(2023).
The Wall Street Stampede: Exit as Governance with Interacting Blockholders, 1994-2011.
[Dataset]. UK Data Service.
https://doi.org/10.5255/UKDA-SN-856716
