Block-ownership structure, bank nominee director and crash-risk

(2015) Block-ownership structure, bank nominee director and crash-risk. Finance Research Letters, 14. pp. 20-28.

Text Chauhan, FRL, 2015, Block-ownership structure, bank nominee director and crash-risk.pdf Access to this file is embargoed until UNSPECIFIED. Download (271kB)

Abstract

We study the effect of outside block-ownership on the future firm-specific crash-risk of Indian firms. Major and dedicated block-owners play a significant role in aggravating the firm’s susceptibility towards crash-risk. Within a novel regulatory setup in India, where borrowing firms are entitled to a bank nominated board-member, we find an ancillary influence of bank nominee’s presence in dissipating block-owners influence on firm-level crash-risk. These results support the monitoring hypothesis in alleviating future firm-level crash-risk. Our results are robust to alternate model specifications, different crash-risk and block-ownership measures, clustering, and an array of control variables.

Item Type:	Article
Subjects:	H Social Sciences > HG Finance
Depositing User:	Symplectic Admin
Date Deposited:	31 Mar 2016 10:03
Last Modified:	31 Mar 2016 10:03
DOI:	10.1016/j.frl.2015.07.002
URI:	http://livrepository.liverpool.ac.uk/id/eprint/2022421

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