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Do non‐controlling large shareholders affect corporate over‐financialization?: A shareholder hybrid perspective

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  • Bingxiang Li
  • Dan Zhang

Abstract

This study investigates the monitoring role of non‐controlling large shareholders (NCLS) on firms' over‐financialization. We compared over‐financialized firms with NCLS with those without. Our first finding suggests that firms with NCLS have a lower extent of over‐financialization. We also find that the hybridity between controlling shareholders and NCLS in a firm decreases over‐financialization. Additional analyses show that NCLS monitor over‐financialization by alleviating corporate myopia. Furthermore, our results reveal that over‐financialization decreases with the relative strength of NCLS compared to controlling shareholders, NCLS' number, and NCLS' shareholdings. Our conclusions remain valid after accounting for endogeneity and employing measures of over‐financialization.

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  • Bingxiang Li & Dan Zhang, 2025. "Do non‐controlling large shareholders affect corporate over‐financialization?: A shareholder hybrid perspective," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 46(4), pages 1917-1933, June.
    • Handle: RePEc:wly:mgtdec:v:46:y:2025:i:4:p:1917-1933
    DOI: 10.1002/mde.3871
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