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The value of private banks in corporate governance: Evidence from the Armstrong investigation

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Author Info
Cantillo, Miguel () (IESE Business School)
Abstract

The paper studies the market reaction to the withdrawal of a prominent private bank -Kuhn Loeb- from the board of several firms. The event study shows that although Kuhn Loeb added significant value to the firms where it had a board seat, most of this value came from reduced industry competition. Moreover, it seems that weaker competition manifested itself in monopoly rather than monopsony power. This article analyzes the event's context -the Armstrong Investigation in 1905- and the political currents that eventually prevented private banks from being activist shareholders in the United States.

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File URL: http://www.iese.edu/research/pdfs/DI-0700-E.pdf
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Publisher Info
Paper provided by IESE Business School in its series IESE Research Papers with number D/700.

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Length: 39 pages
Date of creation: 17 Jul 2007
Date of revision:
Handle: RePEc:ebg:iesewp:d-0700

Contact details of provider:
Postal: IESE Business School, Av Pearson 21, 08034 Barcelona, SPAIN
Web page: http://www.iese.edu/
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Related research
Keywords: Antitrust; Corporate governance; Financial history;

Find related papers by JEL classification:
G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Mortgages
G24 - Financial Economics - - Financial Institutions and Services - - - Investment Banking; Venture Capital; Brokerage
K21 - Law and Economics - - Regulation and Business Law - - - Antitrust Law
L41 - Industrial Organization - - Antitrust Issues and Policies - - - Monopolization; Horizontal Anticompetitive Practices
N21 - Economic History - - Financial Markets and Institutions - - - U.S.; Canada: Pre-1913

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This page was last updated on 2009-11-18.

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