Changes in Block Ownership in the London Stock Exchange

Posted: 10 Jun 2008

See all articles by Aslihan Bozcuk

Aslihan Bozcuk

Bond University, Australia; Akdeniz University, Faculty of Economics and Administrative Sciences

Meziane Lasfer

Bayes Business School, City, University of London

Abstract

We analyze the time-series distribution of large blockholders and managerial ownership in the UK over the last decade. We find a significant decrease in the size of block ownership of a large number of companies. We show that the increase in firm's size and risk and the decrease in performance explain a large proportion of this change. We also find that the dilution of ownership through new issues rather than sales of stakes are the main reasons for the decrease in management ownership and the holdings of pressure-resistant investors, such as fund managers and pension funds. Overall, our results are consistent with the contractual hypothesis as companies appear to consider ownership by different categories as substitute means of resolving agency conflicts.

Keywords: Corporate governance; Ownership structure; Managerial ownership

JEL Classification: G30, G32, G34

Suggested Citation

Bozcuk, Aslihan and Lasfer, Meziane, Changes in Block Ownership in the London Stock Exchange. International Journal of Business, Vol. 13, No. 1, 2008, Available at SSRN: https://ssrn.com/abstract=1141315

Aslihan Bozcuk (Contact Author)

Bond University, Australia ( email )

Gold Coast, QLD 4229 Australia
Australia

Akdeniz University, Faculty of Economics and Administrative Sciences ( email )

Antalya, Kampus 07058
Turkey

Meziane Lasfer

Bayes Business School, City, University of London ( email )

106 Bunhill Row
London, EC1Y 8TZ
Great Britain
+44 20 7040 8634 (Phone)
+44 20 7040 8881 (Fax)

HOME PAGE: http://https://www.bayes.city.ac.uk/faculties-and-research/experts/meziane-lasfer

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