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- W2550384691 abstract "Using a sample of 23,804 firms from around the world, we document that block shareholdings by foreign investors are a widespread phenomenon, being present on average in one third of listed firms in each market. Through a general equilibrium model, we show that foreigners and locals share ownership to capture the former’s competitive advantages, while reducing the latter’s moral hazards, and that foreign blockholding size is lower if the local securities market provides effective monitoring through price discovery. Consistent with the theory our cross-country evidence shows that foreigners hold more blocks when they possess technological advantages, when local firms operate in a weak governance environment, and when the host stock market is illiquid. These results are obtained even after controlling for patterns of bilateral foreign direct investments and for information, corporate control and regulatory barriers that render concentrated foreign ownership costly." @default.
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- W2550384691 date "2012-01-01" @default.
- W2550384691 modified "2023-09-27" @default.
- W2550384691 title "Why Do Foreigners Become Blockholders? Theory and Evidence" @default.
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- W2550384691 doi "https://doi.org/10.2139/ssrn.1787771" @default.
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