Exit as governance: do blockholders affect corporate innovation in large US firms?

Research output: Contribution to journalArticle

Abstract

Using a sample of large US firms, this study shows that blockholders in combination with liquidity can contribute positively to innovation (R&D investments). We contribute to the literature on managerial myopia that has focused mainly on large owners and their type (short-term/long-term). Our results are in line with recent theoretical studies arguing that blockholders in combination with market liquidity can mitigate managerial myopia, as suggested by the exit model of governance. The results indicate that blockholders can be efficient in resolving agency problems and that they can enhance long-term prosperity, even when the individual blockholder investment horizon may not be long.

Details

Authors
Organisations
External organisations
  • Hanken School of Economics
Research areas and keywords

Subject classification (UKÄ) – MANDATORY

  • Economics

Keywords

  • Blockholders, Innovation, Liquidity, Myopia, Ownership, R&D
Original languageEnglish
JournalAccounting and Finance
Publication statusE-pub ahead of print - 2019 Jul 9
Publication categoryResearch
Peer-reviewedYes