Publication Type
Journal Article
Version
submittedVersion
Publication Date
1-2025
Abstract
This study examines the impact of the presence of institutional dual-holders, whose portfolios hold both loans and equity securities of the same firms, on those firms' voluntary disclosures. Using mergers between institutional shareholders and lenders to the same firms as exogenous shocks to identify firms with institutional dual-holders that have high relative equity ownership, we document that such firms are less likely to provide management forecasts and disclose fewer voluntary 8-K items. In cross-sectional analyses, we find that the reduction in voluntary disclosures is more pronounced when institutional dual-holders have higher board representation and when firms have lower litigation risk. In addition, we find that firms with institutional dual-holders provide more private disclosures to their lenders via loan contract covenants. Additional analyses indicate that the impact of institutional dual-holders on corporate disclosures is driven by both their monitoring and trading incentives.
Keywords
corporate disclosures, dual-holders, institutional investors, monitoring, opportunistic trading
Discipline
Accounting | Corporate Finance | Finance and Financial Management
Research Areas
Corporate Reporting and Disclosure
Publication
Contemporary Accounting Research
ISSN
0823-9150
Identifier
10.1111/1911-3846.13022
Publisher
Wiley
Citation
CHENG, Lin; CHENG, Qiang; WENG, Liwei; and YAN, Mark Yuzhi.
Institutional dual-holders and corporate disclosures: A natural experiment. (2025). Contemporary Accounting Research.
Available at: https://ink.library.smu.edu.sg/soa_research/2078
Copyright Owner and License
Authors
Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial-No Derivative Works 4.0 International License.
Additional URL
https://doi.org/10.1111/1911-3846.13022
