Firms' Potential for Economic Sustainability and Firm Value: The Moderating Role of Blockholders

Khine Kyaw, Steen Thomsen, Sirimon Treepongkaruna*

*Corresponding author for this work

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Firms that strive to innovate (i.e., firms that invest in research and development—R&D) have high potential for economic sustainability due to the possibility of generating new platforms of growth and future revenue. However, it is little understood whether financial markets incorporate (if at all) information on firms' potential for economic sustainability. After all, firms' information on R&D investments is very opaque. This poses a challenge to investors to incorporate into firm value any economic sustainability emanating from such information. We investigate whether blockholders, owners with at least a 5% shareholding in a firm, help reflect in firm value the firms' potential for economic sustainability. We find that active blockholders, rather than passive blockholders, help incorporate in firm value the potential for economic sustainability. Thus, active blockholders help mitigate agency problems in firms and help financial markets digest firms' potential for economic sustainability
Original languageEnglish
JournalSustainable Development
Issue number5
Pages (from-to)884-901
Number of pages18
Publication statusPublished - Oct 2022

Bibliographical note

Published online: 09 January 2022.


  • Active owners
  • Blockholders
  • Economic sustainability
  • Firm value
  • R&D

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