Browse > Article
http://dx.doi.org/10.13106/jafeb.2020.vol7.no4.29

The Determinants of Blockholder Presence: Evidence from Korea  

KIM, Hung Sik (College of Management and Economics, Dongguk University Gyeongju Campus)
CHO, Kyung-Shick (College of Management and Economics, Dongguk University Gyeongju Campus)
Publication Information
The Journal of Asian Finance, Economics and Business / v.7, no.4, 2020 , pp. 29-39 More about this Journal
Abstract
The purpose of this study is to investigate the determinants of blockholder presence in the Korean stock market. This study examines previous theories and studies, points that previous studies did not examine, and proposes two hypotheses. To verify two hypotheses, fundamental data were collected from firms listed on Korea Exchange from 2005 to 2017. As explanatory variables, we use the factors and characteristics of the firms used in the previous studies. Logistic regression analysis was conducted to test the determinants of blockholder presence. We find that firm size is the most distinctive factor determining the presence of blockholder, and firm idiosyncratic risk is the most similar factor determining the existence of each blockholder. Tobin Q shows significant value in family and government, and R&D intensity appears to be a negative related to the presence of blockholder in financial institutions. We also find that the determinant of blockholder presence differs from the mechanisms that govern each individual blockholder type when all blockholders grouped together. This suggests that there is blockholder heterogeneity within Korea listing firms. Our findings contribute to investors and policy makers who interested in the determinants of the presence of blockholder and blockhoder heterogeneity in Korea stock market.
Keywords
Blockholder Presence; Blockholder Heterogeneity; Firm Size; Idiosyncratic Risk; Tobin's Q;
Citations & Related Records
Times Cited By KSCI : 4  (Citation Analysis)
연도 인용수 순위
1 Mazumder, M. M. M. (2017). Top-executive compensation: The role of corporate ownership structure in Japan. Journal of Asian Finance, Economics and Business, 4(3), 35-43. http://dx.doi.org/10.13106/jafeb.2017.vol4.no3.35   DOI
2 Rossetto S., & Stagliano, R. (2012). The existence of blockholders and corporate governance, empirical evidence from U.S. Paper presented at the 29th International Conference of the French Finance Association (AFFI), June 7, 2012.
3 Volkova, E. (2018). Blockholders diversity: Effect of polyphony on the power of monitoring (PhD Dissertation). University of Melbourne, Department of Finance. Melbourne, Australia..
4 Yim, S. G. (2020). Individual blockholder's influence on accounting quality: Evidence from Korea. Journal of Asian Finance, Economics and Business, 7(1), 59-69. https://doi.org/10.13106/jafeb.2020.vol7.no1.59   DOI
5 Allen, J. W., & Phillips, G. M. (2000). Corporate equity ownership, strategic alliances, and product market relationships. The Journal of Finance, 55(6), 2791-2815.   DOI
6 Denis, D. J., & Sarin, A. (1999). Ownership and board structures in publicly traded corporations. Journal of Financial Economics, 52(2), 187-223.   DOI
7 Cao, C., Simin, T., & Zhao, J. (2008). Can growth options explain the trend in idiosyncratic risk? The Review of Financial Studies, 21(6), 2599-2633.   DOI
8 Cronqvist, H., & Fahlenbrach, R. (2008). Large shareholders and corporate policies. The Review of Financial Studies, 22(10), 3941-3976.   DOI
9 Demsetz, H., & Lehn, K. (1985). The structure of corporate ownership: Causes and consequences. Journal of Political Economy, 93(6), 1155-1177.   DOI
10 Dennis, P., & Strickland, D. (2004). The determinants of idiosyncratic volatility (Working Paper). University of Virginia, Charlottesville, VA.
11 Fahlenbrach, R., & Stulz, R. M. (2009). Managerial ownership dynamics and firm value. Journal of Financial Economics, 92(3), 342-361.   DOI
12 Dlugosz, J., Fahlenbrach, R., Gompers, P., & Metrick, A. (2006). Large blocks of stock: Prevalence, size, and measurement. Journal of Corporate Finance, 12(3), 594-618.   DOI
13 Dou, Y., Hope, O. K., Thomas, W. B., & Zou, Y. (2018). blockholder exit threats and financial reporting quality. Contemporary Accounting Research, 35(2), 1004-1028.   DOI
14 Edmans, A., Fang, V. W., & Zur, E. (2013). The effect of liquidity on governance. The Review of Financial Studies, 26(6), 1443-1482.   DOI
15 Ang, A., Hodrick, R. J., Xing, Y., & Zhang, X. (2006). The crosssection of volatility and expected returns. The Journal of Finance, 61(1), 259-299.   DOI
16 Fee, C. E., Hadlock, C. J., & Thomas, S. (2006). Corporate equity ownership and the governance of product market relationships. The Journal of Finance, 61(3), 1217-1251.   DOI
17 Helwege, J., Pirinsky, C., & Stulz, R. M. (2007). Why do firms become widely held? An analysis of the dynamics of corporate ownership. The Journal of Finance, 62(3), 995-1028.   DOI
18 Ferreira, M., & Matos, P. (2008). The colors of investors' money: The role of institutional investors around the world. Journal of Financial Economics, 88(3), 499-533.   DOI
19 Gompers, P., Ishii, J., & Metrick, A. (2003). Corporate governance and equity prices. Quarterly Journal of Economics, 118(1), 107-155.   DOI
20 Hadlock, C. J., & Schwartz-Ziv, M. (2019). Blockholder heterogeneity, multiple blocks, and the dance between blockholders. The Review of Financial Studies, 32(11), 4196-4227. https://doi.org/10.1093/rfs/hhz022.   DOI
21 Himmelberg, C. P., Hubbard, R. G., & Palia, D. (1999). Understanding the determinants of managerial ownership and the link between ownership and performance. Journal of Financial Economics, 53(3), 353-384.   DOI
22 Holderness, C. G. (2009). The myth of diffuse ownership in the United States. The Review of Financial Studies, 22(4), 1377-1408.   DOI
23 Kim. H. S., & Cho, K. S. (2019). Are the factors determining the size of block ownership different? Evidence from Korea. International Journal of Economics and Management, 13(2), 343-356.
24 Kwan, J. H., & Lau, W. Y. (2020). Do firm characteristics and industry matter in determining corporate cash holdings? Evidence from hospitality firms. Journal of Asian Finance, Economics and Business, 7(2), 9-20. https://doi.org/10.13106/jafeb.2020.vol7.no2.9   DOI
25 Lee, H. Y., & Lee, J. C. (2003). An empirical study on the determinants of ownership structure of listed companies in Korea: Evidence from panel data. The Korean Journal of Financial Management, 20(2), 41-72.