ABSTRACT

This paper examines whether distracted shareholders reduce firms’ value of cash holdings. Following prior literature, we construct a firm-year level shareholder ‘distraction’ measure, by exploiting exogenous shocks to institutional shareholders’ portfolios. We find that firms with distracted shareholders experience a decrease in the marginal value of cash holdings, which indicates that firms with distracted shareholders are more likely to misallocate company resources due to lack of monitoring. We further find that this effect is more pronounced for firms with low information asymmetry, few product market competitive threats, and high analyst coverage. The results of this paper suggest that institutional investor attention distraction will reduce firms’ monitoring intensity, which exacerbates firms’ opportunistic behaviors.

摘要

本文研究了分心的股东是否会降低公司现金持有的价值。根据先前的文献，我们通过利用对机构股东投资组合的外生冲击，构建了一个公司年度级别的股东“分心”衡量标准。我们发现，股东分心的公司的现金持有边际价值下降，这表明股东分心的公司更可能由于缺乏监督而错配公司资源。我们进一步发现，这种效应对于信息不对称程度低、产品市场竞争威胁少和分析师覆盖率高的公司更为明显。本文的研究结果表明，机构投资者的注意力分散会降低企业的监控强度，从而加剧企业的机会主义行为。