{"title":"Corporate Financial and Investment Policies in the Presence of a Blockholder on the Board","authors":"Anup Agrawal, Tareque Nasser","doi":"10.2139/ssrn.1783891","DOIUrl":"https://doi.org/10.2139/ssrn.1783891","url":null,"abstract":"We examine the relation between the presence of an independent director who is a blockholder (IDB) and corporate policies, risk-taking, and market valuation. After accounting for endogeneity, firms with an IDB have significantly (1) lower levels of cash holdings, payout and research and development (R&D) expenditures, (2) higher levels of capital expenditures, and (3) lower risk. The market appears to value IDB presence and the associated decrease in dividend yield. About 75% of the IDBs in our sample are individual investors, who drive most of our results. Our findings suggest that IDB presence plays a valuable role in shaping some corporate policies and allocating corporate resources.","PeriodicalId":112137,"journal":{"name":"Corporate Governance II: Boards","volume":"5 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2018-05-02","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"121527513","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}