Prof. Andrei Simonov from the Stockholm School of Economics is giving a VGSF research seminar on "Shareholder Homogeneity and Firm Value: The Disciplining Role of Non-Controlling Shareholders" on FRIDAY, May 12th, from 15:30 to 17:00 at the Institute for Advanced Studies (Institut für Höhere Studien, Stumpergasse 56, 1060 Wien), Lecture Room (HS) 2. Please find the paper's abstract below.

Coffee and snacks are going to be available in the cafeteria of IHS, which is located next to the lecture room, before and after the seminar.

Information regarding the further schedule of the VGSF research seminar can be found at www.vgsf.ac.at! Andrei is going to be available for discussions on Thursday and Friday. If you would like to meet him, please let me know.

Best, Michael Halling

Abstract We study how the shareholding structure of a firm affects its stock price and profitability. We argue that the degree of shareholder homogeneity affects firm value. Homogeneous shareholders act as a disciplining device on managers, inducing them to be more transparent and to engage less in value destroying activities. This leads to higher firm profitability, higher stock price and lower volatility. Shareholder homogeneity represents an alternative and indirect source of corporate governance based on the stock market. We test this hypothesis by using a dataset containing information on all the shareholders for each firm in Sweden from 1995 to 2001. We construct two proxies for shareholder homogeneity: the first is based on the age cohort of the shareholders, and the second on their degree of college interaction. For each firm, we measure the degree of homogeneity of all shareholders. Using this proxy, we show that greater homogeneity increases firm profitability and returns, and reduces analysts’ forecasting errors and dispersion, and stock volatility.