Existem evidências sobre a diferenciação entre empresas pré-operacionais e empresas operacionais em aspectos relacionados com a estrutura de ativos, a estrutura de capital, a rentabilidade de ativos, oportunidades de crescimento e a reação do mercado à divulgação financeira. Essas diferenças apontam que projetos de investimento afetam diversos aspectos da empresa e geram expectativas no mercado quanto à geração futura de resultados. A pesquisa foi realizada analisando-se empresas do mercado de capitais brasileiro divididas em duas amostras ou grupos de empresas: pré-operacionais e operacionais. Foram realizados dois testes. O primeiro, a partir de informações financeiras divulgadas trimestralmente com o cálculo de indicadores econômico-financeiros, em que se verificaram diferenças de médias. O segundo, a partir das datas de divulgação dos relatórios financeiros, em que se verificou, com o auxílio da técnica de estudo de eventos, que há diferença estatística significativa dos retornos anormais acumulados entre essas duas amostras em razão da reação do mercado à divulgação financeira, denotando sua importância como componente informativo para ajustes dos preços das ações. Adicionalmente, foi estendido o teste de estudo de evento para analisar a reação do mercado à divulgação das menores e maiores variações dos ativos não circulantes. Esta variável é utilizada no estudo como proxy dos esforços da empresa na formação de capital produtivo, verificando-se que o mercado não reagiu às baixas variações desse ativo. No entanto, o mercado reage de forma limitada à informação quando a variação desse ativo está entre as maiores variações. Embora os resultados dos testes estejam limitados às amostras utilizadas, fornecem uma direção no sentido de entender as mudanças nos fundamentos de valor dessas empresas. / There is evidence about the differentiation between pre-operational and operational companies on aspects related to the structure of assets, capital structure, asset profitability, growth opportunities and market reaction to financial disclosure. These differences indicate that investment projects affect many aspects of the company and generate market expectations about the future generation of results. The survey was conducted by analyzing companies in the Brazilian capital market divided into two samples or groups of companies: preoperational and operational. Two tests were performed. The first, from the quarterly financial information disclosure with the calculation of economic-financial indicators. Differences of means were observed. The second, from the disclosure date of the financial reports. It was observed with the help of the technique of event studies, significant statistical difference of abnormal cumulative returns between these two samples as a result to the market reaction on the financial disclosure, denoting its importance as an informational component for adjustment of stock prices. Additionally, the event study test was extended to analyze the market reaction to the disclosure of minor and major changes in non-current assets. This variable is used in the study as proxy of the company\'s efforts in the formation of capital efficiency. It was observed that the market did not react to the low variations of this asset. However, the market limitedly reacted to the information when the variance of this asset is among the largest variations. Although the test results are limited to the samples used, provides a direction in order to understand the changes in the fundamentals of value of these companies.

Thesis advisor: William B. Stevenson / Thesis advisor: Sandra Waddock / The main purpose of this dissertation research is to understand the collaborative interactions among actors engaging in change efforts in the existing institutional arrangements. Specifically, this dissertation research sheds light on the collaboration networks of social investors who desire both their own financial benefits and stakeholder welfare, by filing shareholder resolutions to bring environmental or stakeholder concerns to the attention of corporate managers. My research strategy in this dissertation is to propose and write a theoretical study and two empirical studies. I propose in chapter 2 a conceptual and theoretical framework for inquiring into social investors' collaboration strategies to develop the field of shareholder resolutions on social issues. The key argument is researchers pay attention to focal actors, multiple actors, and the relationships among them to understand the social mechanisms which integrate active shareholders with the field of social resolutions. In order to determine social investors' strategies to initiate and mobilize their filing activities, based on the social movement perspectives and a social network approach, I propose four conceptual dimensions from the social movement perspectives: identity, social relationships, target identification, and issue framing. In two empirical studies, I test my propositions by analyzing 1650 shareholder resolutions filed by 267 social investors from 2002 to 2007. The first study presented in chapter 4 addresses who initiate social resolution filings, by examining determinants of social investors' proactive initiating activities. When religious investors have brokerage positions, their initiating activity of filing social resolutions are very proactive. However, social investors' range of stock ownership does not go along with their brokerage positions. These findings imply that leading social investors need to have brokerage positions when they have faith-based identity, but that they don't need social resources when they have enough financial resources, a wide range of stocks. The second study presented in chapter 5 explains how leading social investors attract to mobilize their potential followers. Interestingly, the reciprocation hypothesis, "give and take of co-filing support," is negatively supported, indicating a division of labor in the field of social resolutions. In addition, lead-filing social investors who successfully attract and mobilize other investors aim at target companies that are well known among other social investors, and frame issues in wide angles in their social resolutions. These empirical studies demonstrate that active social investors developed their collaboration networks dependent upon their faith-based identity, social relations, targets identification and issue framing strategies. In this dissertation, I assert the necessity and importance of studies on the activities of shareholders by demonstrating that some active investors have strategically led the socially responsible investment movement. This dissertation provides counter-evidence to the conventional assumption that corporate managers should ignore stakeholder welfare if they pursue shareholder value. It also demonstrates that the network-based movements can be a good platform for social change agents to develop their own fields. Strategically, as they interact with each other, small and weak actors can build their own field to collectively influence corporate management. In this sense, the network-based movements underscore the way the infrastructure of a field emerges. / Thesis (PhD) — Boston College, 2009. / Submitted to: Boston College. Carroll School of Management. / Discipline: Organization Studies and Corporate Responsibility.

Thesis advisor: Thomas J. Chemmanur / My Ph.D. dissertation consists of three essays. The first essay examines the effect of hedge funds on target shareholder gains in leveraged buyouts (LBOs). I find that the initial buyout premium is increasing in the preannouncement presence of hedge funds, measured as the fraction of target equity held by hedge funds before the announcement. Using a geographic instrument for the presence of hedge fund, I find that this relationship persists even after controlling for endogeneity. I further show that this effect holds only for active hedge funds and long-term hedge funds, and is stronger for management-led LBOs than for third-party LBOs. Overall, the findings suggest that hedge funds protect target shareholder interests in LBOs by using their hold-out power. The second essay examines the relation between expected market volatility and the demand for liquidity in open-end mutual funds. The empirical results are consistent with precautionary motives for holding liquid assets, i.e., fund managers tilt their holdings more heavily toward liquid stocks when the market is expected to be more volatile. This dynamic preference for liquid stocks is more pronounced among small fund families, low-load funds, funds whose past performance has been unfavorable, funds with high return volatility, growth-oriented funds, and high-turnover funds. I further show that this type of behavior is valuable for fund investors during high volatility periods because it has led to significantly (both statistically and economically) higher subsequent abnormal returns. The third essay, co-authored with Thomas Chemmanur and Gang Hu, directly tests Brennan and Hughes' (1991) information production theory of stock splits by making use of a large sample of transaction-level institutional trading data. We compare brokerage commissions paid by institutional investors before and after a split, and relate the informativeness of institutional trading to brokerage commissions paid. We also compute realized institutional trading profitability net of brokerage commissions and other trading costs. Our results can be summarized as follows. First, both commissions paid and trading volume by institutional investors increase after a stock split. Second, institutional trading immediately after a split has predictive power for the firm's subsequent long-term stock return performance; this predictive power is concentrated in stocks which generate higher commission revenues for brokerage firms and is greater for institutions that pay higher brokerage commissions. Third, institutions make positive abnormal profits during the post-split period even after taking brokerage commissions and other trading costs into account; institutions paying higher commissions significantly outperform those paying lower commissions. Fourth, the information asymmetry faced by firms decreases after a split; the greater the increase in brokerage commissions after a split, the greater the reduction in information asymmetry. Overall, our results are broadly consistent with the implications of the information production theory. / Thesis (PhD) — Boston College, 2009. / Submitted to: Boston College. Carroll School of Management. / Discipline: Finance.

Este estudo objetivou investigar a influência da estrutura de propriedade sobre a informatividade dos lucros contábeis divulgados pelas empresas negociadas no mercado acionário brasileiro. Foi considerada como informatividade a intensidade da relação entre o lucro contábil e o retorno das ações, mensurada pelo coeficiente angular da reta estimada entre essas duas variáveis. A pesquisa teve como foco a influência específica de duas características da estrutura de propriedade: a concentração dos votos e a divergência entre os direitos das ações (voto versus fluxo de caixa) sobre a informatividade dos lucros contábeis. Tendo em vista a realidade do mercado brasileiro, a pesquisa considerou a adoção das práticas diferenciadas de governança corporativa como mecanismo redutor da influência da concentração de votos e da divergência entre direitos sobre a informatividade dos lucros contábeis. Adicionalmente, a pesquisa abordou a diferença da informatividade entre o lucro contábil e o dividendo, provocada pela divergência entre os direitos das ações (voto versus fluxo de caixa). A importância deste estudo, no ambiente brasileiro, encontra-se no fato de o mercado brasileiro, diferente dos mercados desenvolvidos, ser caracterizado por uma forte concentração dos votos nas mãos de poucos acionistas e pelo desvio entre os direitos de voto e fluxo de caixa por intermédio da emissão de ações preferenciais. A relação entre a informatividade dos lucros contábeis e a concentração de votos e a divergência entre direitos foi fundamentada pelo efeito entrincheiramento e pelo efeito alinhamento. A metodologia adotada foi baseada na utilizada nos estudos de Fan e Wong (2002) e Francis et. al. (2005) desenvolvidos, respectivamente, no mercado do sudoeste asiático e no mercado americano. Utilizou-se a definição do maior acionista controlador. A amostra utilizada na pesquisa foi formada pelas empresas não-financeiras listadas na Bolsa de Valores de São Paulo (Bovespa) durante o período de 2000 a 2006. Como a amostra de trabalho selecionada apresenta características de um painel desbalanceado, os modelos adotados foram estimados em três abordagens: Pooled, Efeitos Fixos e Efeitos Aleatórios. Os resultados encontrados indicam que a concentração dos votos exerce uma influência negativa sobre a informatividade dos lucros contábeis. Quanto à divergência entre direitos, a influência negativa foi confirmada parcialmente. Diferente do resultado esperado, a divergência entre direitos exerce influência positiva sobre a informatividade dos lucros contábeis. Quando a divergência entre direitos passa a ser observada em conjunto com o excesso de votos, verifica-se a sua influência negativa sobre a informatividade dos lucros contábeis. Essa evidência sugere que a divergência entre os direitos passa a influenciar negativamente a informatividade somente quando o maior acionista controlador possui a maioria (>50%) dos votos. O maior impacto negativo sobre a informatividade dos lucros contábeis foi observado quando ocorre a combinação da concentração de votos com a divergência entre direitos. Sobre a adoção de práticas diferenciadas de governança corporativa, não foi confirmado o seu papel como elemento redutor da influência da concentração de votos e da divergência entre direitos sobre a informatividade dos lucros contábeis. Em relação à comparação da informatividade dos lucros contábeis e dos dividendos, foram levantadas as seguintes evidências: (i) quando condicionadas a divergência entre direitos, foi observada a diferença estatística entre as informatividades dos lucros contábeis e a dos dividendos, e (ii) ao contrário do esperado, sob a influência da divergência entre direitos, a informatividade dos lucros contábeis aumenta e à dos dividendos diminui. / This present study consists on examining the effects of the ownership structure over the informativeness of the accounting earnings which are disclosed by traded companies in the Brazilian stock market. Informativeness is about measuring how intense is the relation between accounting earnings and stock prices considering the angular coefficient of the probable straight line between these two variables. The research focus on the specific influence of two ownership structure´s characteristics: the concentration of the vote rights and the divergence between the rights of the shares (vote versus cash flow) on the accounting earnings informativeness. Analyzing the Brazilian market, this study considerate the use of the different practices of corporative governance to reduce the influence of the concentration of vote rights and the divergence between rights on the accounting earnings informativeness. It also approaches the difference of the informativeness between accounting earnings and dividends, caused by the divergence between the rights of the shares (vote versus cash flow). The relevance of this study, in the Brazilian reality, meets in the fact that the Brazilian market, different from other developed markets, is the typical concentration of the vote rights at the hands of a few shareholders, plus the deviation between the rights to vote and cash flow through emission of preferential shares. The relation between the informativeness of the accounting earnings and the concentration of votes and the divergence among rights was based on the entrenchment and the alignment effects. Its methodology was based on the studies made by Fan and Wong (2002) and Francis et. al. (2005) in Asian southwestern market and the American market. The definition of the largest ultimate owner was used. The sample used in the research was formed by the no-financial companies listed in the São Paulo Stock Exchange (Bovespa) during the years of 2000 the 2006. There were three approaches: pooled, fixed effect and random effect. The results show that the concentration of the vote rights has a negative influence on the accounting earnings informativeness. Concerning the divergence between rights, the negative influence was confirmed partially. However, as an unexpected result, the divergence between rights has positive influence on the accounting earnings informativeness. When the divergence between rights is taken into consideration within the excess of votes, it becomes clear its negative influence over the accounting earnings informativeness. This evidence suggests that the divergence among rights can influence negatively the informativeness only when the largest ultimate owner has the majority (>50%) of the vote rights. The most negative impact on the accounting earnings informativeness was observed when the combination of the concentration of votes with the divergence between rights occurs. Concerning the different practices of corporative governance as the reducing element of the influence of the concentration of votes and the divergence between rights over the accounting earnings informativeness, it was not confirmed. At last, comparing informativeness of accounting earnings and dividends, evidences emerged: (i) when the divergence for rights were conditioned, there was a difference in statistics between informativeness of accounting earnings and dividends, and (ii) whereas, unexpectedally, under the influence of the divergence within rights, accounting earnings informativeness increased and informativeness dividends decreased.

O estudo refere-se à verificação da admissibilidade e da conveniência da exclusão facultativa de acionista controlador em sociedade anônima. O tema não é propriamente novo no Brasil. Intenciona-se, no entanto, construir a hipótese a partir de fundamento legal diferente. A Lei 6.404/76 (LSA) apenas destina a exclusão para casos de acionista remisso (artigo 107, II), permanecendo silente com relação ao inadimplemento de deveres de colaboração e lealdade (em conjunto, deveres de cooperação). Nesse contexto, a doutrina e a jurisprudência brasileiras tendem a admitir a hipótese de exclusão em tais casos por aplicação do artigo 1.030 do Código Civil, destinado a regular a matéria no âmbito das sociedades simples. Para tanto, aproximam a companhia fechada das sociedades de pessoas a fim de justificar, dada a alegada omissão da lei especial a esse respeito, o tratamento por analogia. A partir do estudo sistemático da LSA, que compreende, entre outros, o entendimento do princípio da circulação de ações e da extensão dos deveres de boa-fé entre os sócios, pretende-se admitir a hipótese com base na própria lógica acionária, em razão da eventual relevância do relacionamento societário para a consecução do fim social. Em tais companhias, o adimplemento dos deveres de cooperação torna-se tão imprescindível quanto o adimplemento do dever de conferimento para o alcance do escopo comum. Em decorrência desse raciocínio, a exclusão torna-se admissível na ocorrência de inadimplemento de qualquer dever social que inviabilize, real ou potencialmente, o preenchimento do fim social. A identificação de eventual affectio societatis entre os acionistas, portanto, passa a ser irrelevante. Admitir a hipótese no que se refere a acionista controlador se revela ainda importante instrumento de limitação do exercício ilegítimo do poder de controle e não se confunde com a sanção de perdas e danos prevista na LSA por abuso de poder de controle. Por fim, será analisada a conveniência da exclusão do controlador, em razão de sua relevância pessoal para a consecução da atividade, a participação societária por ele detida e da possibilidade de dissolver-se parcialmente a sociedade, com a saída do acionista minoritário descontente. / The study refers to the admissibility and convenience of excluding the controlling shareholder in corporations. The theory is not exactly new in Brazil. What we intend to do, however, is to support the hypothesis in different legal grounds. The legal system, of which is set forth in the Brazilian Corporation Law (Law 6.404/76), limits the exclusion of a shareholder in the events of non-performance of the duty to pay-up the share capital (article 107, II). The legal framework remains silent regarding the non-performance of the duties of collaboration and loyalty (together, duties of cooperation). In such context, both the Brazilian doctrine and jurisprudence tend to allow the shareholder exclusion under the default of the duties of cooperation on the grounds of the Brazilian Civil Law Code. In order to provide that, it is mandatory to align the closely held corporation to a typical institution of intuitu personae, which requires the evidence of an existent personal relationship among the shareholders (affectio societatis). We defend the application of the hypothesis with grounds on the Brazilian Corporation Law itself. The study proposes a systematic and logical analysis of the legal corporation framework, which comprehends the understanding of its main principles (such as the free circulation of the shares and the relevance of the good faith relationship among shareholders to the company activity). Concerning this analysis, it would be possible to admit the shareholder exclusion even if they hold the controlling position when the maintenance of the corporate structure of how it was first built is of key importance to the joint goal. In such a company, not only the duty to pay-up the share capital appears to be vital, but the duties of cooperation as well. The exclusion may be deemed if, in any case, the shareholder violates any duty in such a manner that is able to jeopardize the corporate activity. Therefore, the subjective investigation of the personal relationship among the shareholders becomes irrelevant. It would be even more important to admit the hypothesis regarding the controlling shareholder, as a mechanism to limit its illegal exercise. This sanction does not integrate the sanction foreseen in the law regarding abuse of power of control. Afterwards, we intend to verify the convenience of excluding the controlling shareholder, due to his personal relevance to the activity, the amount of company shares he holds and the alternative of implement the strictu sensu partial dissolution.

Comme toute personne susceptible de subir un préjudice, l'associé se trouve titulaire d'une action civile. Il dispose en effet de la possibilité de demander la réparation à l'auteur de la faute à l'origine de ce préjudice. Cette action civile dite individuelle peut être exercée, ou bien devant les juridictions civiles entendues au sens large, ou bien devant les juridictions répressives dans le cas où la faute ainsi commise serait infractionnelle. Mais en sa qualité de membre d'un groupement sociétaire, l'associé dispose également de la possibilité de demander la réparation du préjudice que subirait la société. Aussi, à côté de l'action civile à titre individuel, il peut exercer une autre action civile, cette fois-ci, à titre social, autrement appelée l'action civile ut singuli.Cette possibilité offerte à l'associé d'exercer deux actions se justifie par la diversité des préjudices dont il peut souffrir, particulièrement lorsqu'ils sont imputables au dirigeant de société. L'existence de ces deux actions permet ainsi, dans son principe, une meilleure réparation du préjudice subi par l'associé. Le mécanisme de l'action civile se veut donc avantageux pour l'associé.Toutefois, au-delà l'articulation parfois difficile entre les deux actions, l'action en réparation du préjudice social pouvant indirectement emporter la réparation du préjudice de l'associé, le constat selon lequel l'associé n'exerce que trop peu son action civile, principalement en raison de considérations matérielles et financières, a été dressé.Souhaitant rendre effectif coûte que coûte ce mécanisme considéré comme vertueux, le législateur et les juges, particulièrement attentifs aux besoins des victimes, donc de l'associé et de sa société, ont dès lors fait le choix de faciliter l'exercice de cette action, et ce aussi bien devant le juge civil que devant le juge pénal.Aujourd'hui, il est acquis que les diverses interventions législatives et jurisprudentielles ont eu pour conséquence de rendre l'action en réparation de l'associé, qu'elle soit exercée à titre individuel ou à titre social, davantage effective que par le passé. Reste que cette effectivité s'est faite au prix d'une part, d'un affaiblissement des conditions de forme de cette action, et d'autre part, d'un élargissement de ses conditions de fond. / As any individual suffering damages, a shareholder is vested with the right to file a legal claim designed to compensate the injury suffered. He is entitled to seek compensation from the wrongdoer in Court. Under French law, such a direct lawsuit can be filed either with a civil court or a criminal one where the alleged wrong arises out of a criminal offense. In addition, as a co-owner of the corporation, a shareholder is also entitled to file a derivative claim, namely to seek redress for damages incurred by the corporation itself on its behalf. Hence alongside a direct suit, a shareholder can file a derivative claim, that is, sue on behalf of the corporation, known as "action ut singuli under French law".Such a possibility granted to a shareholder, is vindicated by various possible wrongs he has suffered, especially where they originate in an executive breaching his duties. The coexistence of both direct and derivative claims is designed to provide the aggrieved shareholder with the best possible compensation for damages suffered. Such a legal mechanism, that is, the possibility of filing two distinct legal claims is primarily intended to benefit the shareholder.Nonetheless, in addition to possible difficulties in delineating the proper articulation between those two lawsuits - for a derivative claim may indirectly lead to indemnify the wrong individually suffered by the shareholder - it has been pointed out that shareholders rarely file direct claims, mainly due to financial considerations.To enhance the efficiency of such a desirable legal mechanism, both lawmakers and courts, mindful of the needs of the aggrieved parties, that is the legal entity and the shareholder considered individually, have sought to ease recourse to such a lawsuit whether filed with criminal or civil courts.As of today, it is beyond question that both statutory acts and case law resulted in providing shareholders with greater efficiency as to their ability of obtaining redress for damages incurred, whether the suit is direct or derivative.Yet, such a renewed efficiency has been attained at the cost lowering standards as to procedural prerequisites, on the one hand, and broadening the reach of such a legal claim by means of relaxing substantive requirements on the other.

Over the last two decades, US corporate governance has witnessed a significant increase in the incidence and influence of shareholder activism. Shareholder activism, however, has been found to be inconsistent with US corporate governance which is framed within director primacy theory. In this theory, the board is able to carry out a unique combination of managerial and monitoring roles effectively, and shareholders are only capital providers to companies. Shareholder activism is normatively found inimical to effective and efficient decision-making, i.e. the board's authority, and to the long-term interests of public companies. The increasing willingness of institutional shareholders to participate into the decision-making processes of their portfolio companies is at odds with US corporate governance. Therefore, the aim of this thesis is to examine whether director primacy theory should be softened to accommodate greater shareholder activism in US corporate governance. This thesis presents an analysis of the legal rules that reflect director primacy theory. In this respect, US shareholders have traditionally had limited participatory power. The way in which the courts perceived the board's authority also stymied shareholder participation. This thesis considers not only legal and regulatory developments in the wake of the 2007-2008 financial crisis, but also the governance developments through by-law amendments which could potentially make an overall change in the balance of power between shareholders and the board. Shareholders are slowly moving to the centre of corporate governance in the US. History has shown that the board of directors often failed to prevent manager-induced corporate governance failures. This thesis argues that shareholder activism is necessary for improving the web of monitoring mechanisms and for a well-functioning director primacy model. Shareholder activism forces the board to more critical about management, which is a prerequisite for the director primacy model. Therefore, this thesis argues that shareholder activism should therefore be accommodated into US corporate governance. The proposed approach addresses accountability problems more effectively than the current director primacy model while recognising the board authority and enhances decision-making processes of public companies. In this regard, it makes several recommendations to soften the current director primacy model: establishing a level playing for private ordering, adopting the proxy access default regime, the majority voting rule, the universal proxy rules, and enhancing the disclosure requirements of shareholders. The present research also demonstrates that contemporary shareholder activism involves many complexities. It contains different types of shareholder activism, which differ by objectives, tools, and motives. It could be used for purely financial purposes or non-financial purposes or both. Furthermore, the concept of stewardship has been developed to address public interest concerns, namely short-termism in the market and pressures by activist funds through shareholder activism. In this way, this thesis develops a complete positive theory about shareholder activism rather than focussing on a specific type of activism. This complete analytical framework constitutes more reliable basis to draw normative conclusions rather than focussing on a particular type of activism.

This research studies the moderating effect of ownership concentration and the strength of investor protection on the relationship between the level of board independence, as measured by the number of non-executive directors in relation to total number of directors and the firm performance. Using a sample of 9018 observations on all non-financial publicly listed firmsin 27 OECD countries between the year 2012 and 2015. The findings show a positive correlation between board independence and firm performancein all regression models. Furthermore, I find the negative moderating effect on both shareholder concentration and investor protection on the main relationship.

In the first essay titled "Shareholder Coordination, Information Diffusion and Stock Returns", we show that the quality of information sharing networks linking firms' institutional investors has stock return predictability implications. First, we demonstrate that firms with high shareholder coordination experience less local comovement and less post earnings announcement drift, consistent with the notion that coordination improves firms' information environment. We then document that the stock return performance of firms with high shareholder coordination leads that of firms with low shareholder coordination, supporting the view that coordination acts as an information diffusion channel. Finally, we provide evidence consistent with the notion that the market does not readily recognize the superior quality of high shareholder coordination firms and prices it gradually through the trading of sophisticated institutional investors, thereby causing future returns to be positively associated with shareholder coordination. In the second essay titled "Shareholder Coordination and Stock Price Informativeness", we find that stock prices of firms with better information sharing networks linking institutional shareholders exhibit higher levels of idiosyncratic volatility. This positive relation between shareholder coordination and stock price informativeness is mainly driven by coordination among dedicated and independent institutions and exists even after accounting for endogeneity. We further show that institutional trading serves as an information diffusion channel that strengthens the relationship of shareholder coordination with price informativeness. Overall, our results indicate that a higher degree of shareholder coordination leads to more informative stock prices by encouraging the collection of and trading on private information.

We compare acquisition activity, method of payment choice, and the long-run value implications of acquisitions by newly public single-class and dual-class US companies. Our results show that dual-class IPO firms make relatively more acquisitions in innovative industries and are less likely to pay with stock as compared to single-class IPO firms. We provide evidence that the reluctance of dual-class firms to pay with stock is not related to the insiders' cash-flow rights but it is significantly positively related to the insiders' voting rights and wedge between the insiders' voting rights and cash-flow rights. We also find that acquiring dual-class IPOs perform better in the long-run than acquiring single-class IPO firms, and the better performance is mainly due to acquisitions in innovative industries. The results suggest that insiders of dual-class IPOs try to retain control during subsequent M&A activities. The governance structure in such firms allows them to make investments in high risk projects that enhance shareholder value in the long-run. Next, we examine the acquisition performance of family and non-family firms in the S&P 500 universe. Using style-adjusted and market-adjusted buy-and-hold returns (BHAR) and controlling for firm and merger characteristics, we find that the post-merger performance of family firms is significantly better than that of non-family firms. In particular, the mean one-year style-adjusted buy-and hold abnormal return is around 18% higher for family acquirers than for non-family acquirers. Further, contrary to the argument that founding family members make value-destroying diversifying acquisitions to minimize the risk of their personal portfolio, we do not find that family firms lose value in diversifying acquisitions. This result is consistent with Stein's model (1997) showing that diversification helps to reduce the cost of capital of the firm.