Ownership Concentration and Firm Risk: The Moderating Role of Mid-Sized Blockholders

Silvia Rossetto*, Nassima Selmane, Raffaele Staglianò

*Corresponding author for this work

Research output: Contribution to journalArticleAcademicpeer-review

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This study analyzes the relationship between mid-sized blockholders and firm risk. We show that ownership structure matters for firm risk, beyond the first largest blockholder. Firms with multiple blockholders take more risk than firms with just one blockholder, even when controlling for the stake of the largest blockholder. Consistent with the diversification argument, we find that firm risk increases by 22% when the number of blockholders increases from one to two. Our results are robust to controlling for blockholder type and firm characteristics. We carry out various robustness checks to tackle endogeneity issues. More generally, we provide evidence that firms' decisions are affected by mid-sized blockholders, and not merely the largest blockholder. This is in line with theoretical predictions.
Original languageEnglish
Pages (from-to)377-410
Number of pages34
JournalJournal of Business Finance & Accounting
Issue number1-2
Publication statusPublished - Jan-2023


  • Corporate Governance
  • Ownership Structure
  • Firm Risk
  • Blockholders
  • Volatility of Operating Performance

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