The Mutual Friend: Dual Holder Monitoring and Firm Investment Efficiency

Miguel Angel Anton · Luca Xianran Lin

52 citations0/0 files storedThe Review of Corporate Finance Studies

No readable copy stored yet — this record is metadata only.

No open-access location is known for this record yet.

Literature note Cite in a project Citation map

Corporate Finance and Governance Corporate Insolvency and Governance Private Equity and Venture Capital

Abstract

Abstract We investigate the influence of simultaneous equity holdings by creditors (dual holders) on investment efficiency. Such creditors have stronger incentives and power to monitor firm investment as they have cash flow and control rights from both debt and equity sides. We provide evidence that dual holders, particularly noncommercial bank dual holders, significantly mitigate overinvestment. For high growth firms and those subject to debt overhang, dual holders also alleviate underinvestment. Equity value increases at the presence of dual holders. Our results indicate that by improving firm investment efficiency, dual holders not only make creditor investments safer but also create value for shareholders. Received March 26, 2019; editorial decision September 17, 2019 by Editor Isil Erel.

Paper brief

Loading…

Cite this work

Citation unavailable for this work.

BibTeX RIS CSL-JSON

No public copy is stored for this record, so only the metadata is cited.

Citations in this library

Citation map →

Stored only when both papers are in the corpus — 52 citations exist upstream.

References

1976Theory of the firm: Managerial behavior, agency costs and ownership structure 1984Corporate financing and investment decisions when firms have information that investors do not have 1986Agency Costs of Free Cash Flow, Corporate Finance, and Takeovers 1977Determinants of corporate borrowing 1986Large Shareholders and Corporate Control 1990Managerial discretion and optimal financing policies 2009How does financial reporting quality relate to investment efficiency?1998The Influence of Institutional Investors on Myopic R&D Investment Behavior

Cited by

2021Simultaneous debt–equity holdings and corporate tax avoidance 2023Dual Ownership and Risk-Taking Incentives in Managerial Compensation 2022The effect of shareholder-debtholder conflicts on corporate tax aggressiveness: Evidence from dual holders

Explore the map →

Papers that cite the same references — the relational fallback while embeddings are still backfilling.

Imported from OpenAlex (CC0) — nothing here is generated.