When Control Exceeds Ownership: Blockholder Influence and Investment Efficiency in Swedish Publicly Listed Firms
(2025) BUSN79 20251Department of Business Administration
- Abstract
- Purpose: The purpose of the study is to investigate whether ownership-control divergence,
measured by the wedge of the largest shareholder and the wedge power gap between the two
largest shareholders, is associated with reduced investment efficiency in Swedish listed firms.
Methodology: The study is quantitative and follows a deductive research approach. The
dependent variables for the main models are residuals predicted from first-stage regressions.
A sensitivity analysis utilizing a different modeling approach is also conducted in order to
improve robustness.
Theoretical perspectives: Various perspectives of agency theory explains the wedge, as well
as power asymmetries among large shareholders as potential distortive... (More) - Purpose: The purpose of the study is to investigate whether ownership-control divergence,
measured by the wedge of the largest shareholder and the wedge power gap between the two
largest shareholders, is associated with reduced investment efficiency in Swedish listed firms.
Methodology: The study is quantitative and follows a deductive research approach. The
dependent variables for the main models are residuals predicted from first-stage regressions.
A sensitivity analysis utilizing a different modeling approach is also conducted in order to
improve robustness.
Theoretical perspectives: Various perspectives of agency theory explains the wedge, as well
as power asymmetries among large shareholders as potential distortive mechanisms.
Empirical Foundation: Previous literature on the wedge of the largest shareholder and its
impact on investment efficiency, as well as other firm matters from a broader sense within
corporate finance literature. Furthermore, evidence from power asymmetries among top
shareholders is presented.
Conclusions: A larger wedge for the largest shareholder is associated with reduced
investment efficiency, though this is based on non-normally distributed dependent variables.
The sensitivity analysis finds no significant results, warranting caution in interpretation. No
significant relationship is found between the wedge power gap and investment efficiency. (Less)
Please use this url to cite or link to this publication:
http://lup.lub.lu.se/student-papers/record/9203646
- author
- Rodin Söderberg, Lucas LU and Cedermark, Axel LU
- supervisor
- organization
- course
- BUSN79 20251
- year
- 2025
- type
- H1 - Master's Degree (One Year)
- subject
- keywords
- wedge, wedge power gap, investment efficiency, blockholder, agency theory
- language
- English
- id
- 9203646
- date added to LUP
- 2025-06-26 14:16:12
- date last changed
- 2025-06-26 14:16:12
@misc{9203646,
abstract = {{Purpose: The purpose of the study is to investigate whether ownership-control divergence,
measured by the wedge of the largest shareholder and the wedge power gap between the two
largest shareholders, is associated with reduced investment efficiency in Swedish listed firms.
Methodology: The study is quantitative and follows a deductive research approach. The
dependent variables for the main models are residuals predicted from first-stage regressions.
A sensitivity analysis utilizing a different modeling approach is also conducted in order to
improve robustness.
Theoretical perspectives: Various perspectives of agency theory explains the wedge, as well
as power asymmetries among large shareholders as potential distortive mechanisms.
Empirical Foundation: Previous literature on the wedge of the largest shareholder and its
impact on investment efficiency, as well as other firm matters from a broader sense within
corporate finance literature. Furthermore, evidence from power asymmetries among top
shareholders is presented.
Conclusions: A larger wedge for the largest shareholder is associated with reduced
investment efficiency, though this is based on non-normally distributed dependent variables.
The sensitivity analysis finds no significant results, warranting caution in interpretation. No
significant relationship is found between the wedge power gap and investment efficiency.}},
author = {{Rodin Söderberg, Lucas and Cedermark, Axel}},
language = {{eng}},
note = {{Student Paper}},
title = {{When Control Exceeds Ownership: Blockholder Influence and Investment Efficiency in Swedish Publicly Listed Firms}},
year = {{2025}},
}