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.

[img] 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 10:09
Last Modified: 31 Mar 2016 10:09
DOI: 10.1016/j.frl.2015.07.002
URI: http://livrepository.liverpool.ac.uk/id/eprint/2022471
Repository Staff Access