Ownership Concentration, Corporate Control Activity, and Firm Value: Evidence from the Death of Inside Blockholders

MYRON B. SLOVIN, Marie Sushka

Research output: Contribution to journalArticle

91 Scopus citations

Abstract

We analyze how ownership concentration affects firm value and control of public companies by examining effects of deaths of inside blockholders. We find shareholder wealth increases, ownership concentration falls, and extensive corporate control activity ensues. Share price responses are related to the deceased's equity stake. Control group holdings fall for two‐thirds of the firms due to either the estate's dispersal or inheritors selling stock. A majority of firms become targets of control bids: three‐quarters of bids are successful; one‐third are hostile. Our evidence is broadly consistent with Stulz's (1988) model of the relationship between ownership concentration and firm value. 1993 The American Finance Association

Original languageEnglish (US)
Pages (from-to)1293-1321
Number of pages29
JournalJournal of Finance
Volume48
Issue number4
DOIs
StatePublished - 1993
Externally publishedYes

ASJC Scopus subject areas

  • Accounting
  • Finance
  • Economics and Econometrics

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