NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Large Block Shareholders, Institutional Investors, Boards of Directors and Bank Value in the Nineteenth Century

Howard Bodenhorn

NBER Working Paper No. 18955
Issued in April 2013
NBER Program(s):   CF   DAE

Share prices of modern corporations are influenced by the size and structure of boards of directors, large individual and institutional investors, and shareholder voting rights, among other governance features. It is not clear whether the same features mattered historically, given recent research suggesting that the principal concern in the nineteenth century was neither managerial self-dealing nor majority shareholder expropriation that might reduce the returns to common shareholders. Rather, at many nineteenth-century corporations, common shareholders were also customers and shareholding offered preferential access to the firms' goods and services. Using modern empirical tools in a study of banks, this study finds evidence supporting the shareholder-as-customer model. Bank values responded positively to the presence of large-block individual shareholders (those more concerned with access to loans) and negatively to large-block institutional investors (those more concerned with dividend returns than access). Moreover, firm value declined as directors consumed larger fractions of a bank's loans, which reduced the bank's ability to extend credit to other shareholders.

You may purchase this paper on-line in .pdf format from SSRN.com ($5) for electronic delivery.

Information about Free Papers

You should expect a free download if you are a subscriber, a corporate associate of the NBER, a journalist, an employee of the U.S. federal government with a ".GOV" domain name, or a resident of nearly any developing country or transition economy.

If you usually get free papers at work/university but do not at home, you can either connect to your work VPN or proxy (if any) or elect to have a link to the paper emailed to your work email address below. The email address must be connected to a subscribing college, university, or other subscribing institution. Gmail and other free email addresses will not have access.

E-mail:

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w18955

Users who downloaded this paper also downloaded these:
Bodenhorn w17808 Voting Rights, Share Concentration, and Leverage at Nineteenth-Century US Banks
Amiti and Weinstein w18890 How Much do Bank Shocks Affect Investment? Evidence from Matched Bank-Firm Loan Data
Balakrishnan, Billings, Kelly, and Ljungqvist w18984 Shaping Liquidity: On the Causal Effects of Voluntary Disclosure
McMillan, Masters, and Kazianga w19245 Disease Control, Demographic Change and Institutional Development in Africa
Zeckhauser and Pound Are Large Shareholders Effective Monitors? An Investigation of Share Ownership and Corporate Performance
 
Publications
Activities
Meetings
NBER Videos
Data
People
About

Support
National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email: info@nber.org

Contact Us