Download or read book Capital Structure and Corporate Governance written by Lorenzo Sasso and published by Kluwer Law International B.V.. This book was released on 2013-08-01 with total page 248 pages. Available in PDF, EPUB and Kindle. Book excerpt: Despite a clear distinction in law between equity and debt, the results of such a categorization can be misleading. The growth of financial innovation in recent decades necessitates the allocation of control and cash-flow rights in a way that diverges from the classic understanding. Some of the financial instruments issued by companies, so-called hybrid instruments, fall into a grey area between debt and equity, forcing regulators to look beyond the legal form of an instrument to its practical substance. This innovative study, by emphasizing the agency relations and the property law claims embedded in the use of such unconventional instruments, analyses and discusses the governance regulation of hybrids in a way that is primarily functional, departing from more common approaches that focus on tax advantages and internal corporate control. The author assesses the role of hybrid instruments in the modern company, unveiling the costs and benefits of issuing these securities, recognizing and categorizing the different problem fields in which hybrids play an important role, and identifying legal and contracting solutions to governance and finance problems. The full-scale analysis compares the U.K. law dealing with hybrid instruments with the corresponding law of the most relevant U.S. jurisdictions in relation to company law. The following issues, among many others, are raised: decisions under uncertainty when the risks of opportunism of the parties is very high; contract incompleteness and ex post conflicts; protection of convertible bondholders in mergers and acquisitions and in assets disposal; use of convertible bonds to reorganise and restructure a firm; timing of the conversion and the issuer’s call option; majority-minority conflict in venture capital financing; duty of loyalty; fiduciary duties to preference shareholders; and financial contract design for controlling the board’s power in exit events. Throughout, the analysis includes discussion, comparison, and evaluation of statutory provisions, existing legal standards, and strategies for protection. It is unlikely that a more thorough or informative account exists of the complex regulatory problems created by hybrid financial instruments and of the different ways in which regulatory regimes have responded to the problems they raise. Because business parties in these jurisdictions have a lot of scope and a strong incentive to contract for their rights, this book will also be of uncommon practical value to corporate counsel and financial regulators as well as to interested academics.
Download or read book Capital Structure Implications for Corporate Governance written by Nishanth Rajan and published by . This book was released on 2012 with total page 158 pages. Available in PDF, EPUB and Kindle. Book excerpt: This dissertation consists of two essays that look at the outcome of agency costs of debt on the firm's capital structure and governance decisions. The first essay considers how monitoring of management by a shareholder aligned board of directors may induce an asymmetric information problem between shareholders and creditors. To mitigate this problem, the board may be more lenient with the manager and may have an incentive to be inherently weaker. In the second essay, I consider how creditors and shareholders interact when both actively monitor the manager. I demonstrate that, ex-post to floating debt, active shareholders may unilaterally shirk their monitoring duties to shift the burden of costly monitoring to debt claimants.
Download or read book Corporate Governance Ownership Structure and Firm Performance written by Hoang N. Pham and published by Routledge. This book was released on 2022-01-25 with total page 190 pages. Available in PDF, EPUB and Kindle. Book excerpt: The relationship between ownership structure and firm performance has been studied extensively in corporate finance and corporate governance literature. Nevertheless, the mediation (path) analysis to examine the issue can be adopted as a new approach to explain why and how ownership structure is related to firm performance and vice versa. This approach calls for full recognition of the roles of agency costs and corporate risk-taking as essential mediating variables in the bi-directional and mediated relationship between ownership structure and firm performance. Based on the agency theory, corporate risk management theory and accounting for the dynamic endogeneity in the ownership–performance relationship, this book develops two-mediator mediation models, including recursive and non-recursive mediation models, to investigate the ownership structure–firm performance relationship. It is demonstrated that agency costs and corporate risk-taking are the ‘missing links’ in the ownership structure–firm performance relationship. Hence, this book brings into attention the mediation and dynamic approach to this issue and enhances the knowledge of the mechanisms for improving firm’s financial performance. This book will be of interest to corporate finance, management and economics researchers and policy makers. Post-graduate research students in corporate governance and corporate finance will also find this book beneficial to the application of econometrics into multi-dimensional and complex issues of the firm, including ownership structure, agency problems, corporate risk management and financial performance.
Download or read book Corporate Governance Ownership Structure and Capital Structure written by Yi Feng and published by . This book was released on 2020 with total page 35 pages. Available in PDF, EPUB and Kindle. Book excerpt: Purpose - This paper seeks to contribute to the existing capital structure and board structure literature by examining the relationship among corporate governance, ownership structure and capital structure.Design/methodology/approach - The paper employs a panel data of 595 firm-year observations from a unique and comprehensive data set of 119 Chinese real estate listed firms from 2014 to 2018. It uses fixed effect and random effect regression analysis techniques to examine the hypotheses.Findings - The results show that the board size, ownership concentration and firm size have positive influences on capital structure. State ownership and firm profitability have inverse influences on capital structure. Research limitations/ implications - The findings suggest that better-governed companies in the real estate sector tend to have better capital structure. These findings highlight the unique Chinese context and also offer regulators a strong incentive to pursue corporate governance reforms formally and jointly with ownership structure. Lastly, the results suggest investors the chance to shape detailed expectations about capital structure behavior in China. Future research could investigate capital structure using different arrangement, conducting face-to-face meetings with the firm's directors and shareholders. Practical implications- The findings offer support to corporate managers and investors in forming or /and expecting an optimal capital structure, and to policymakers and regulators for ratifying laws and developing institutional support to improve the effectiveness of corporate governance mechanisms.Originality / value - This paper extends, as well as contributes to the current capital structure and corporate governance literature, by proposing new evidence on the effect of board structure and ownership structure on capital structure. The results will help policymakers in different countries in estimating the sufficiency of the available corporate governance reforms to improve capital structure management.
Download or read book Capital Structure Equity Ownership and Corporate Performance written by Krishna Dayal Pandey and published by Taylor & Francis. This book was released on 2023-08-16 with total page 135 pages. Available in PDF, EPUB and Kindle. Book excerpt: This book provides empirical insights into the relationship between capital and equity-ownership structure of Indian manufacturing companies and their financial performance. It discusses and analyses the basic theories and concepts associated with capital structure, debt financing, levered and unlevered firms, the various forms of ownership, agency problem and its kind and the exploitation of minority owners by the large and largest owners. The study employs a set of the most reliable and suitable econometric estimation techniques to draw meaningful inferences on the Indian manufacturing sector. The novelty of this book lies in three particular aspects: the depth and dimension with which the topic is addressed; the robust empirical evidence that it has produced and the simple and intelligible approach with which it is authored. It communicates the crucial relevance of corporate capital structure and equity-ownership to the moderation of agency relationship and shaping the internal governance mechanism, which ultimately results in increased or decreased operational efficiency and financial performance. It will enable readers to understand whether an increased amount of debt capital would bring about positive results for firms or create an extra burden on the management of their finances, preventing them from taking productive investment decisions due to the threat of liquidation. The book will find an audience among advanced students, scholars and researchers who are interested in understanding the corporate finance practices and governance mechanism of Indian organizations.
Download or read book Impact of Corporate Governance and Ownership Structure on Capital Structure written by Imran Khan and published by . This book was released on 2016 with total page 15 pages. Available in PDF, EPUB and Kindle. Book excerpt: This study explores the relationship between corporate governance and ownership structure and capital structure of all non-financial firms listed in KSE 100 index, Pakistan. The time period is of 6 years from 2008 to 2013. The effect of corporate governance and ownership structure variables like board size, non-executive directors, average board meeting attendance, CEO/Chair duality, remuneration structure and managerial ownership and control variables like, return on assets (ROA) and firm size on leverage (Debt/Equity) has been observed using multivariate regression analysis under fixed effect approach. Results show that board size, NED, CEO/Chair duality, Remuneration Structure and ROA have negative impact on Debt/Equity ratio. However leverage is not found significantly influenced by Board size, NED and CEO/Chair duality. Board meeting attendance, managerial ownership and firm size have positive effect on leverage. Relationship of managerial ownership and leverage is not significant. Also, relationship between firm size and leverage is not significant. Significant variables are average board meetings attendance, remuneration structure and ROA, while board size, NED, CEO/Chair duality, managerial ownership and firm size are insignificant variables. Therefore results advocate that corporate governance variables like average board meeting attendance, Remuneration structure and Return on assets play essential role to determine of financial blend of the firms.
Download or read book Complementarities in Corporate Governance written by Ralph P. Heinrich and published by Springer Science & Business Media. This book was released on 2002-06-04 with total page 262 pages. Available in PDF, EPUB and Kindle. Book excerpt: Corporate governance reform is currently on the agenda in the European Union, the United States, Japan and in emerging market economies. This book takes a fresh look at the reform debate by focusing on the trade-offs involved in reconciling the diverging interests of shareholders, creditors and managers. It shows how effective corporate governance systems exploit complementarities between the incentives generated by the capital structure, the ownership structure, investor monitoring, takeover threats, and management compensation to minimize the sum of all agency costs facing the public corporation. The book combines a general theoretical treatment with a detailed study of the institutions of corporate governance in Germany, Japan and the United States and a critical assessment of recent reforms.
Download or read book Corporate Finance and the Theory of the Firm written by Stefan Detscher and published by GRIN Verlag. This book was released on 2007-11 with total page 76 pages. Available in PDF, EPUB and Kindle. Book excerpt: Research Paper (undergraduate) from the year 2003 in the subject Business economics - Investment and Finance, grade: 2,0 (B), European Business School - International University Schlo Reichartshausen Oestrich-Winkel (Corporate Finance and Capital Markets), language: English, abstract: This book examines the links between corporate finance and the theory of the firm. As a basis for this analysis, theoretical foundations in corporate finance and the theory of the firm are provided. Furthermore, current research on the theory of the firm and corporate finance for the recently emerged type of firm of the human-capital intensive firm is presented. The most significant part of the analysis is the evaluation of the interrelation between corporate finance and the theory of the firm using a 3x3 matrix. This matrix compares three important theoretical frameworks of the firm (the firm as a nexus of contracts, as a collection of growth options and as a collection of assets) with three major fields of corporate finance (capital structure, corporate governance and valuation). This assessment is done for the traditional asset-intensive industrial firm, one of two basic types of firms in today's economy. For giving an additional insight into current research, the recently emerged human-capital intensive firm is shortly described in comparison to the traditional asset-intensive firm, and implications for corporate finance for this new type of firm are explained. As a conclusion, three major results can be stated: firstly, the theory of the firm definitely influences corporate finance for all described views of the firm, and it is thus an important basis for corporate finance. This fact makes it necessary to consider the underlying issue of the theory of the firm for each problem in corporate finance. Secondly, different views of the theory of the firm have different implications for corporate finance. For example, the appropriate valuation method depends on the considered view of t
Download or read book Financial Management And Corporate Governance written by Daisuke Asaoka and published by World Scientific. This book was released on 2022-06-16 with total page 224 pages. Available in PDF, EPUB and Kindle. Book excerpt: This book provides an integrative perspective on financial management and corporate governance deployed in management decisions. It analyzes wide-ranging issues such as valuation, capital investment, capital structure, mergers and acquisitions, shareholder and stakeholder value management, and corporate governance structure. Throughout the analyses, the book provides a coherent view of firms, laws and markets, and offers practical financial modeling techniques to assist in financial decisions.This book also incorporates the latest developments in practice, such as direct listings and SPACs in capital markets, contractual arrangements in mergers and acquisitions, setting of corporate purpose, protection of minority investors in related party transactions, balancing of shareholder and stakeholder value from an ESG perspective, and the growing influence of activist funds, index investors and proxy advisors. It looks at these complex issues in firm management through the dual lens of asymmetric information and conflicts of interest that managers deal with, and gives coherency and clarity to the understanding of these key issues in management.
Download or read book Capital Structure Managerial Incentives and Corporate Governance written by Christian M. Pfeil and published by Peter Lang Gmbh, Internationaler Verlag Der Wissenschaften. This book was released on 2002 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: What factors determine a firm's financing decision? Informational economics and contract theory have contributed a great deal to answer this question. This book contains three essays that further contribute to this strand of literature with the focus on theories that view capital structure as a disciplining instrument for a self-interested management. Some of the existing theories abstract from other disciplining devices such as ordinary incentive wages to justify debt as a mean to mitigate a moral hazard problem between managers and owners of a firm. Two of the models presented here turn to the question of whether debt can play a role as an incentive device when other incentive mechanisms are available as well. A third model revisits the signaling literature on capital structure in the light of new empirical evidence. All models are embedded into a corporate governance framework that allows to set the conclusions into a broader perspective.
Download or read book The Revolution in Corporate Finance written by Joel M. Stern and published by Wiley-Blackwell. This book was released on 2003-06-02 with total page 648 pages. Available in PDF, EPUB and Kindle. Book excerpt: The Revolution in Corporate Finance has established itself as a key text for students of corporate finance with wide use on a range of courses. Using seminal articles from the highly regarded Bank of America Journal of Applied Corporate Finance, it gives students real insight into the practical implications of the most recent theoretical advances in the field. This extensively revised and updated fourth edition contains a significant amount of new material while retaining key original articles from previous editions. It offers, in one volume, coverage of the latest academic thinking, written by leading financial economists in a way that is accessible to students and corporate management. Uses seminal articles from the highly regarded Bank of America Journal of Applied Corporate Finance. Gives insight into the practical implications of recent theoretical advances in the field. Enhanced by new material, including two new sections on International Finance and International Corporate Governance. Highlights contributions of Nobel Laureate Merton Miller to the field of Finance.
Download or read book Capital Structure Decisions written by Yamini Agarwal and published by John Wiley & Sons. This book was released on 2013-03-29 with total page 208 pages. Available in PDF, EPUB and Kindle. Book excerpt: Inside the risk management and corporate governance issues behind capital structure decisions Practical ways of determining capital structures have always been mysterious and riddled with risks and uncertainties. Dynamic paradigm shifts and the multi-dimensional operations of firms further complicate the situation. Financial leaders are under constant pressure to outdo their competitors, but how to do so is not always clear. Capital Structure Decisions offers an introduction to corporate finance, and provides valuable insights into the decision-making processes that face the CEOs and CFOs of organizations in dynamic multi-objective environments. Exploring the various models and techniques used to understand the capital structure of an organization, as well as the products and means available for financing these structures, the book covers how to develop a goal programming model to enable organization leaders to make better capital structure decisions. Incorporating international case studies to explain various financial models and to illustrate ways that capital structure choices determine their success, Capital Structure Decisions looks at existing models and the development of a new goal-programming model for capital structures that is capable of handling multiple objectives, with an emphasis throughout on mitigating risk. Helps financial leaders understand corporate finance and the decision-making processes involved in understanding and developing capital structure Includes case studies from around the world that explain key financial models Emphasizes ways to minimize risk when it comes to working with capital structures There are a number of criteria that financial leaders need to consider before making any major capital investment decision. Capital Structure Decisions analyzes the various risk management and corporate governance issues to be considered by any diligent CEO/CFO before approving a project.
Download or read book Corporate Governance and Capital Structure Dynamics written by Li-Kai (Connie) Liao and published by . This book was released on 2016 with total page 41 pages. Available in PDF, EPUB and Kindle. Book excerpt: Morellec, Nikolov, and Schürhoff (2012) predict that a self-interested manager prefers a leverage level that is lower than the shareholders' desired level, and effective corporate governance encourages timely capital structure rebalancing. In a U.S. sample during 1996-2008, we confirm that both a higher level of financial leverage and a faster speed of adjustment of leverage toward the shareholders' desired level are associated with a better corporate governance quality as defined by a more independent board featuring CEO-Chairman separation and greater presence of outside directors, coupled with larger institutional shareholding. In contrast, managerial incentive compensation on average discourages use of debt or adjustments toward the shareholders' desired level, consistent with its entrenchment effect. The effect of corporate governance on leverage adjustments is most pronounced when the initial leverage is between the manager's desired level and the shareholders' desired level where the interests of managers and shareholders conflict.
Download or read book Empirical Capital Structure written by Christopher Parsons and published by Now Publishers Inc. This book was released on 2009 with total page 107 pages. Available in PDF, EPUB and Kindle. Book excerpt: Empirical Capital Structure reviews the empirical capital structure literature from both the cross-sectional determinants of capital structure as well as time-series changes.
Download or read book A Study on Capital Structure and Corporate Governance written by Ryoonhee Kim and published by . This book was released on 2011 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: Capital structure and corporate governance are the important areas that represent salient part of corporate finance research. By studying various aspects of the two areas, this study attempts to deepen our understanding of the two. First, this study provides both a theoretical model and empirical evidence on the interaction between capital structure and managerial incentive compensation (one of key measures of corporate governance). Researchers acknowledge that the two interact to each other and the interaction should affect their optimal determination, but few studies formally consider the interaction. This study shows that due to the interaction through agency conflicts, key firm characteristics that represent agency costs affect leverage and managerial incentive compensation in opposite directions. After controlling for the opposite interactions, the two are shown to be positively related. Second, this study provides empirical evidence on the interaction between financial structure and product market performance by examining business group affiliated firms. The firms that are affiliated to a business group is not only affected by their own financial position, but also affected by the position of business groups which the firms belong to. The empirical investigation suggests that affiliated firms lose market shares to their rivals in their product market when their business group is financially weak due to high group leverage. Third, this study examines whether special governance structure of business groups is actually beneficial to the groups0́9 member firms. The study exploit unique dataset of firms that were once stand alone, but later acquired by business groups. The empirical methodology we employ can account for the fact that the firms which are acquired by business groups can be very different from other firms which are not acquired. The findings from matching estimator suggest that performance increase of the acquired firms is significantly greater than the performance of matched stand alone firms, implying that business groups are actually helping their affiliated firms to perform better than stand alone firms.
Download or read book Corporate Governance in Germany written by Jens Köke and published by Springer Science & Business Media. This book was released on 2002-08-28 with total page 188 pages. Available in PDF, EPUB and Kindle. Book excerpt: Corporate governance is an important issue on the research agenda of financial economists. Using a new and unique data set of German corporations this book examines three topics that are crucial to a better understanding of corporate governance: (a) the frequency, causes, and consequences of control transfers, (b) the determinants of acquisition and failure, and (c) the role of corporate governance and market discipline for productivity growth. This book points out methodological drawbacks of previous empirical studies and provides suggestions on how to avoid these problems in research practice.
Download or read book Corporate Governance Capital Structure and Firm Value written by Hamid Ullah and published by LAP Lambert Academic Publishing. This book was released on 2012-08 with total page 124 pages. Available in PDF, EPUB and Kindle. Book excerpt: "Corporate governance is concerned with holding the balance between economic and social goals and between individual and communal goals. The governance framework is there to encourage the efficient use of resources and equally to require accountability for the stewardship of those resources. The aim is to align as nearly as possible the interests of individuals, corporations and society." (Sir Adrian Cadbury, UK, Commission Report: Corporate Governance 1992). "Business continuity and planning is just as important for small companies as it is for large corporations. Plans need to be simple but effective, comprehensive but tailored to the needs of the organisation. Employers have a responsibility to their staff for their safety and security, and we all share the desire to ensure that any disaster or incident - whether natural or otherwise - has a minimal effect on the economic well-being of the country." - The Rt Hon David Blunkett, Home Secretary, London.