Blockholders

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 –

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)