Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/294958 
Authors: 
Year of Publication: 
2021
Citation: 
[Journal:] Junior Management Science (JUMS) [ISSN:] 2942-1861 [Volume:] 6 [Issue:] 2 [Year:] 2021 [Pages:] 408-423
Publisher: 
Junior Management Science e. V., Planegg
Abstract: 
This paper examines the effect of large institutional owners on accounting for goodwill and its resulting impairment charges. Economies of scale predict stronger incentives for large institutional owners to engage in monitoring. Employing a multivariate linear probability model on a sample of U.S. companies with goodwill on their balance sheets during the period from 2009 to 2019, I find that the likelihood of an impairment is more strongly related to an expected impairment when the share of equity held by the firm's largest institutional owners is higher. Results prove to be economically meaningful and are generally robust to different specifications. This evidence is consistent with the active monitor hypothesis by large shareholders to protect their significant investments.
Subjects: 
Goodwill accounting
goodwill impairment
institutional ownership
ownership concentration
monitoring
FASB
SFAS 142
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by Logo
Document Type: 
Article
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