Abstract
This study examines the influence of institutional dual-holders, whose portfolios hold both loans and equity securities of the same firms, on those firms’ disclosures. Using mergers between institutional shareholders and lenders to the same firms as exogenous shocks to identify firms with institutional dual-holders, 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 public disclosures is more pronounced when institutional dual-holders have higher ownership and thus greater ability to influence firms’ disclosures and when firms have lower litigation risk. In addition, we find that firms with institutional dual-holders provide more private disclosures to their dual-holders via loan contract covenants. Additional analyses indicate that the influence of institutional dual-holders on corporate disclosures is driven by both their trading and monitoring incentives.
Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
