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DO MULTIPLE LARGE SHAREHOLDERS PLAY A CORPORATE GOVERNANCE ROLE? EVIDENCE FROM EAST ASIA
Author(s) -
Attig Najah,
El Ghoul Sadok,
Guedhami Omrane
Publication year - 2009
Publication title -
journal of financial research
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.319
H-Index - 49
eISSN - 1475-6803
pISSN - 0270-2592
DOI - 10.1111/j.1475-6803.2009.01255.x
Subject(s) - shareholder , valuation (finance) , corporate governance , valuation effects , business , agency cost , accounting , finance
We examine the governance role of multiple large shareholder structures (MLSS) to determine their valuation effects in a sample of 1,252 publicly traded firms from nine East Asian economies. We find that the presence, number, and size of multiple large shareholders are associated with a significant valuation premium. Our results also show that the identity of MLSS influences corporate value and that the valuation effects of MLSS are more pronounced in firms with greater agency costs. Our results imply that MLSS play a valuable monitoring role in curbing the diversion of corporate resources.