My work on blockholders (large shareholders) studies how blockholders play a critical role in corporate governance due to their large stakes – alleviating concerns on the “separation of ownership and control” and the “ownerless corporation”. In particular, I show how blockholders can exert governance not only through “voice” (engaging with companies) but also “exit” (voting with their feet). Contrary to conventional wisdom, exit is a governance mechanism in itself, not the antithesis of governance, and short-term exit can encourage long-term behavior by firms.
Surveys:
- Survey in Annual Review of Financial Economics (briefer) (Edmans 2014)
- Chapter for Handbook of Corporate Governance (more extensive, containing hand-collected data on blockholders and a unifying model) (Edmans, Holderness 2017)
Theory:
- Governance through exit with
- Single blockholder (Edmans JF 2009)
- Multiple blockholders (Edmans, Manso RFS 2011)
- Multiple firms (Edmans, Levit, Reilly RFS 2019)
- Responsible investment to reduce externalities (Edmans, Levit, Schneemeier 2022)
- Use of debt to induce blockholder monitoring (Edmans JFE 2011)
Empirics
- Effect of liquidity on governance (Edmans, Fang, Zur RFS 2013)