Download or read book Essays in Corporate Finance Corporate Governance and Family Firm Behavior written by Markus Fütterer and published by . This book was released on 2022 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Performance and Behavior of Family Firms written by Esra Memili and published by MDPI. This book was released on 2018-03-23 with total page 174 pages. Available in PDF, EPUB and Kindle. Book excerpt: This book is a printed edition of the Special Issue "Performance and Behavior of Family Firms" that was published in IJFS

Download or read book Three Essays on Corporate Governance of Family Firms written by Tarek El Masri and published by . This book was released on 2018 with total page 171 pages. Available in PDF, EPUB and Kindle. Book excerpt: This dissertation is comprised of three essays on issues related to the corporate governance of family firms. The first essay explores how owners-managers of family firms conceptualize and define their firms. Understanding the essence of a family firm helps us better understand their governance and behaviour. This essay contributes to the family business literature by presenting the seven most important criteria in identifying a family business (Handler 1989; Shanker & Astrachan 1996), namely: family ownership, control, involvement, succession, long-term vision, founders' legacy, and extended family of employees. The essay also contributes a familiness measurement tool that can be used in future research aiming at better understanding the family firm. The second essay investigates how management control technologies are calibrated in accordance with the sometimes conflicting economic and noneconomic goals resulting from the dual identities of family firms. The results show that family firms calibrate pervasive management control technologies, such as calculative, family-centric or procedural controls to strengthen the business identity and reduce the family identity of their family business. In comparison, the minimal use, or perceived absence, of management control technologies suggest that it accentuates and fosters family identity. Hence, reverting to management control technologies becomes related in a unilateral way to the business identity of the firm, despite the dual control ambition of family firms. The third essay analyzes CEO and TMT compensation practices to identify patterns that can explain the gap between family firms and the pool of external highly qualified executives. The data analysis highlights a connection between the degree of family ownership, the composition of the BOD, and the identity of the CEO. The results also show that family firms rely more heavily on cash-based awards than on equity-based awards as a form of CEO and TMT compensation. Family firms are reluctant to use option-based rewards and the use of share-based awards is also kept at a minimum. Other evidence point towards a role that institutional ownership plays in restructuring the compensation packages of the TMTs at family firms. Keywords: Family Firms, Definition of Family Firms, Family Firm Identity, Management Control Technologies, Corporate Governance, Executive Compensation.

Download or read book Essays on Family Firm Behavior and Compliance with the German Corporate Governance Code written by Christian Kohl and published by . This book was released on 2014 with total page 144 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Essays on Financing Investment and Corporate Governance in Family Firms written by Johannes Ottmar Beyenbach and published by . This book was released on 2019 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Two Essays in Corporate Finance written by An Chee Low and published by . This book was released on 2007 with total page 160 pages. Available in PDF, EPUB and Kindle. Book excerpt: Abstract: Problems of endogeneity often cloud interpretation in corporate governance research. In this dissertation, I make use of changes in takeover laws as exogenous shocks to examine how managers react to a weakening of the corporate governance structure. In the first essay, I examine how the increased protection from hostile takeovers affects managerial incentives to change firm risk, while in the second essay I examine how firm size and firm investment behavior changes in response to the exogenous shocks. In both cases, I find that managers take actions that are beneficial to themselves but are detrimental to shareholders. Empirical evidence in the first essay show that risk-averse managers decrease firm risk in response to an exogenous increase in takeover protection in Delaware during the mid-1990s. I also find that the decrease in firm risk is concentrated among firms with low managerial equity-based incentives. Further, firms respond to the increased protection accorded by the regime shift by providing managers with greater incentives for risk-taking. Overall, the evidence supports the hypothesis that equity-based compensation can be used to align managerial interests with that of shareholders. In the second essay, I find that managers increase their firm size in response to the increased protection from hostile takeovers. The increase is predominantly among firms with low growth and high cash holdings which are exactly the firms where the agency costs of free cash flow are most costly to shareholders (Jensen, 1986). I also predict important differences in managerial empire-building through internal investments versus external acquisitions in the 1980s and 1990s based on changes in stocks and options-based incentives. Consistent with my predictions, managers prefer to empire-build through internal investments during the 1980s, while in 1990s they choose to grow more through external acquisitions.

Download or read book Essays in Corporate Finance and Corporate Governance written by David De Angelis and published by . This book was released on 2012 with total page 192 pages. Available in PDF, EPUB and Kindle. Book excerpt: My dissertation contains three essays in corporate finance and corporate governance. The first essay studies the effect of information frictions across corporate hierarchies on internal capital allocation decisions, using the Sarbanes Oxley Act (SOX) as a quasi-natural experiment. SOX requires firms to enhance their internal controls to improve the reliability of financial reporting across corporate hierarchies. I find that after SOX, the capital allocation decision in conglomerates is more sensitive to performance as reported by the business segments. The effects are most pronounced when conglomerates are prone to information problems within the organization and least pronounced when they still suffer from internal control weaknesses after SOX. Moreover, conglomerates' productivity and market value relative to stand-alone firms increase after SOX. These results support the argument that inefficiencies in the capital allocation process are partly due to information frictions. My findings also shed light on some unintended effects of SOX on large and complex firms. The second essay is co-authored with Yaniv Grinstein and investigates how firms tie CEO compensation to performance. We take advantage of new compensation disclosure requirements issued by the Securities and Exchange Commission in 2006. Firms vary in their choice of performance measures and horizons, and in their reliance on pre-specified goals. Consistent with optimal contracting theories, we find that firms choose performance measures that are more informative of CEO actions, and rely less on pre-specified goals when it is more costly to contract on CEO actions. The third essay investigates the design of division managers (DMs) incentive contracts again taking advantage of the disclosure requirements. I find that firms do not use relative performance evaluation across divisions and that in general most of DM compensation incentives are associated with firm performance instead of division performance. Furthermore, division performance-based incentives tend to be smaller in complex firms, when within-organization conflicts are potentially more severe. I also find that when the probability of promotion to CEO is lower, DM ownership requirements are more stringent and DM compensation incentives are greater. These results support notions that influence costs as well as promotion-based incentives are important considerations in designing DMs contracts.

Download or read book ESSAYS ON CORPORATE FINANCE AND GOVERNANCE written by Serkan Akguc and published by . This book was released on 2014 with total page 218 pages. Available in PDF, EPUB and Kindle. Book excerpt: The analysis of key corporate decisions is mostly restricted to publicly listed firms even though privately held firms constitute a substantial part of any economy. In this dissertation, my goal is to enhance our understanding of some of the important decisions of private firms, namely: cash holdings, investment and performance using unique and large cross-country samples. In the first chapter, I examine cash holdings of private, unlisted firms versus publicly traded firms in 33 European countries during 2002-2011. I find that the average cash-to-assets ratios are lower in the Eurozone than in non-Eurozone countries by 5.4% due to lower transaction demand under a single currency regime. Public firms have higher cash ratios than private firms. However, the difference in cash ratios between public and private firms is higher in the Eurozone than in non-Eurozone countries, reflecting that: (a) precautionary demand is higher in the Eurozone due to risks and pitfalls of policy coordination, and (b) economic adjustments and transfers in the Eurozone more directly affect publicly traded firms than private ones. Moreover, I show that, during the financial crisis, corporate cash ratios increased in the Eurozone, indicating that the increase in precautionary cash demand was greater than a decrease in transaction demand due to the adoption of the Euro. In the second chapter, I compare the operating performance and efficiency of publicly and privately held firms in the UK over the period 2003-2012. I find that privately held firms typically perform better than publicly traded firms. This finding is robust in various model settings, using industry and size as well as propensity scored matched samples, considering alternative definitions of operating performance, ownership structure and taking into account the endogeneity of firm's exchange listing choice. I also show that average operating profitability of public firms is even lower than that of private firms when both types of firms are financially constrained. Finally, I show that informational value of R&D is higher for private firms than it is for public firms. In the third chapter, I examine the relationship between time horizons and corporate investment, both on the firm and country levels, for private, unlisted firms and publicly traded firms using a unique dataset from 73 countries around the world during the time period of 2003-2012. I show that a longer time horizon (i.e. higher propensity to save and invest) on a cultural and country level also manifests itself as higher investment at the firm level. This is robust to using alternative proxies for the country-level time horizon. Investment behavior of private firms, not public firms, follows a country-level horizon pattern, which is reflective of close monitoring by fewer owners and the absence of stock market pressures in making investment decisions. When I consider time-horizon at the firm-level, we find that firms with a longer time horizon invest more, and this effect is more pronounced for public firms than for private firms, given the former's greater, easier, and cheaper access to capital in the public capital market. I also show that public firms invest more and are more responsive to investment opportunities than private firms.

Download or read book Three Essays in Corporate Finance written by Jérôme Philippe Alain Taillard and published by . This book was released on 2010 with total page 210 pages. Available in PDF, EPUB and Kindle. Book excerpt: Abstract: In my dissertation, I first contribute to the capital structure literature by estimating the potential impact of financial distress on a firm's real business operations. Secondly, I contribute to the ownership structure literature, and more broadly to the field of corporate governance, by revisiting the relationship between managerial ownership and firm performance. In my first essay, I analyze a comprehensive sample of defendant firms that found themselves exposed to an unexpected wave of asbestos litigation in the wake of two U.S. Supreme Court decisions. Since these legal liabilities are unrelated to current operations, firms that are in financial distress due to their legal woes provide a natural experiment to study the impact of financial distress on a firm's operational performance. When analyzing firms suffering from this exogenous shock to their finances, I find little evidence of negative spillover effects ("indirect" costs) of financial distress. That is, the competitive position of the distressed firms is not adversely impacted by their weakened financial situation. Furthermore, I find empirical support for a significant disciplinary effect of financial distress as these firms actively restructure and refocus on core operations. In my second and third essays, I focus on the relationship between managerial ownership and firm performance using a large panel dataset of U.S. firms over the period 1988-2004. In the second essay, I reconcile some of the extant literature by showing that the relationship is sensitive to the firm size characteristics of the sample being used. In particular, I recover the classic hump-shaped relationship when focusing only on the largest firms (e.g. Fortune 500 firms), while the relationship turns negative when the sample is comprised of smaller firms. The negative relationship among smaller firms is consistent with entrenchment arguments given that managerial ownership is on average much higher for small firms. Second, I find that for lower levels of managerial ownership, the negative relationship is driven by older firms that have on average less liquid stocks. This finding is consistent with firms that do not perform well enough to create a liquid market for their stock, and hence have to keep high levels of insider ownership in order to avoid a negative price impact that would result from a reduction of their stake. Lastly, these results could also be suggestive of endogeneity concerns. I investigate this issue further in my third essay. Principal-agent models predict that managerial ownership and firm performance are endogenously determined by exogenous changes in a firm's contracting environment. Changes in the contracting environment are, however, only partially observed, and the standard statistical techniques used to address endogeneity may be ineffective in this corporate setting. In my third essay, together with my coauthor Phil Davies, we develop a novel econometric approach to control for the influence of time-varying unobserved variables related to a firm's contracting environment. Using the same large panel dataset of U.S. firms over the period 1988-2004, we find no evidence of a systematic relation between managerial ownership and performance.

Download or read book When Business is in the Blood written by Saim Kashmiri and published by . This book was released on 2012 with total page 264 pages. Available in PDF, EPUB and Kindle. Book excerpt: Family firms play a significant role in the U.S. economy, making up about 35 percent of S & P 500 or Fortune 500 companies and contributing about 65 percent to the U.S. GDP. This research explores differences in strategic behavior and firm performance between family firms and non-family firms, and further explores whether family firms such as Dell Inc. that use their founding family's name as part of their firm name (termed family-named firms, or FN firms) behave and perform any differently versus family firms such as Gap Inc. whose firm name does not include their family's name (termed non-family-named firms, or NFN firms). The first study which is based on a multi-industry sample of 130 publicly listed U.S. family firms over a five-year period (2002-2006), reveals that compared to NFN firms, FN firms have significantly higher levels of corporate citizenship and representation of their customers' voice (i.e., presence of a chief marketing officer) in the top management team. FN firms also have a higher strategic emphasis (i.e., a greater emphasis on value appropriation relative to value creation) compared to NFN firms. Furthermore, FN firms perform better (i.e., have a higher ROA) than NFN firms, and their superior performance is partially mediated by their higher corporate citizenship levels and strategic emphasis. In the second study -- an event study of 1294 product introduction announcements of 107 publicly listed U.S. family firms from 2005-2007 -- I find that relative to NFN firms, FN firms are rewarded more by the stock market for introducing new products. Superior returns to FN firms' new product introductions are partially mediated by these firms' history of trustworthy product-related behavior: FN firms, particularly those with corporate branding, and those wherein a founding family member holds the CEO or Chairman position, are more likely to exhibit a history of avoiding such product-related controversies as product safety issues, and deceptive advertising. The third study explores differences in strategic behavior and firm performance between family firms and non-family firms in the context of 7 U.S. economic recessions between the years 1970 and 2008. Findings based on a sample of 428 U.S. publicly listed firms reveal that family firms consistently outperform non-family firms during economic recessions. This superior performance is partially driven by family firms' unique strategic behavior: during recessions, family firms maintain higher levels of advertising intensity, exhibit lower financial leverage, and get involved in fewer social and employee-related unethical actions than non-family firms. The three studies taken together have important implications for family firm, branding, CSR, firm valuation, and innovation-related theory and practice. I highlight these implications in my dissertation.

Download or read book Essays on Corporate Finance and Governance written by Johan Molin and published by Stockholm School of Economics Efi Economic Research Institut. This book was released on 1996 with total page 182 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Family and non family firms financial structure written by Carmen Gallucci and published by G Giappichelli Editore. This book was released on 2016-11-29 with total page 169 pages. Available in PDF, EPUB and Kindle. Book excerpt: The monograph “Family and non-family firms' financial structure. The effects of financial crisis: blessing or curse?” deals with the issue of firms’ financial structure. It introduces the debate, moving from the difficult in finding a balance between debts and equity and presenting the actual situation of Italian and European firms. Then, it offers an overview of the main financial theories. Subsequently, it deals with the financial structure issue in family business context, by presenting the state of art on the theme and delineating peculiar problematics faced by family firms. Finally, it provides an empirical investigation about the effect of financial crisis on family and non-family firms’ capital structure, offering a wide discussion of the results and useful implication for theory and practice. The monograph “Family and non-family firms' financial structure. The effects of financial crisis: blessing or curse?”is aimed at family business and financial scholars, undergraduate and postgraduate students, and practitioners.Carmen Gallucci is Associate Professor of ‘Corporate Finance’ and ‘Family Business Governance’ at University of Salerno, where she is the Director of Family Business Observatory. Her research interests are in the area of family business and corporate finance. She is Author of monographs and papers published also on international journals. Rosalia Santulli is Research Fellow in Business Administration at University of Cassino and Southern Lazio and Lecturer of Financial Analysis at University of Salerno. Her research interests are in the area of family business, corporate governance, and corporate finance.

Download or read book How Family Firms Differ written by S. Bhaumik and published by Springer. This book was released on 2014-11-25 with total page 150 pages. Available in PDF, EPUB and Kindle. Book excerpt: Family firms account for a large proportion of firms in most countries. In industrialised countries of North America and Western Europe, they generally account for a large share of small and medium sized enterprises. In emerging market economies such as India, they also account for the majority of the large firms. Their importance for factors such as employment creation notwithstanding, relative to the widely held Anglo-Saxon firms, which are ubiquitous in the economics, finance and management literatures, family firms have historically received much less attention from scholars of these disciplines. However, in part owing to increased focus on emerging markets, there is a growing literature on family firms. In How Family Firms Differ, the authors explore important aspects of family firms, drawing on the existing literature and their own research on these firms.

Download or read book Corporate Finance and Governance in Stakeholder Society written by Shinichi Hirota and published by Routledge. This book was released on 2015-02-11 with total page 318 pages. Available in PDF, EPUB and Kindle. Book excerpt: This book develops a new framework - the stakeholder model - that helps to understand corporate finance and governance in modern society, where the sources of people’s happiness have shifted from monetary to non-monetary factors. The book takes a more comprehensive approach than is typically found in the standard economics and finance literature, by explicitly incorporating both the monetary and non-monetary interests of stakeholders and by examining the value creation of corporations from a much broader perspective. Specifically, the book addresses contemporary issues concerning corporate finance and governance worldwide, including: How should we define corporate value in stakeholder society? What is the role of modern corporations? What are the principles underlying corporate financing decisions? To what extent should shareholder rights be enhanced? What determines the effectiveness of a company’s board of directors? What missions do firms set out and what is the role of mission statements? How can we understand the diversity of financial and governance systems among different countries? What legal and institutional reforms enhance or diminish corporate value in stakeholder society? The book will answer these questions theoretically and empirically.

Download or read book Two Essays in Behavioral Corporate Finance written by Cagri Berk Onuk and published by . This book was released on 2019 with total page 130 pages. Available in PDF, EPUB and Kindle. Book excerpt: The two essays in my dissertation are broadly related to the behavior and decision-making of firm managers and directors, and how those variables are associated with firm outcomes and firms' relationship with investors. The first essay examines the disagreement within the executive team. The model shows the negative effect of disagreement on firm outcomes via executives' reduced effort and the positive effect via decision enhancement. In a novel manner, I identify disagreement through information-based insider trades in opposing directions. The outcome I analyze is firm investments including capital expenditures, acquisitions, and R&D expenses. I uncover negative effects of disagreement on capital expenditures, which is statistically and economically significant. Decision enhancing effects are measured as reduction in a firm's tendency to overinvest, but the results are weaker. Disagreement also hurts firm valuation especially when firms need quick decisions. Overall, disagreement is found to have more harmful than beneficial effects on firms. The second essay, coauthored with Orhan Erdem, examines the effect of piety on individual investor and corporate decision-making, and on the interactions between the two types of agents. We use Turkey as our experimental setting, where piety is likely to have an important effect on financial outcomes due to the country's unique political and religious background. We have proprietary individual investor trading data for a random sample of 25,000 investors, and importantly, we have a number of strong identifiers for investor piety. One of them is a binary variable that indicates whether investors are trading through an Islamic brokerage house. Similarly, we have a few strong variables capturing firm piety. One such variable identifies whether firm executives are affiliated with a secular or a conservative executive club. Our results indicate that religious investors display conservative trading behavior, in particular, they display less overconfidence and higher local bias. Results on firms indicate that apparently religious firms grow their assets faster and are highly valued but have lower operating profitability. We also find that upon events that stir religious sentiment in the country, conservative investors increase their holdings of apparently religious firms.

Download or read book Essays on Norms Corporate Governance and Firm Behavior written by Nina Schwaiger and published by . This book was released on 2018 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book The Family Firm written by Daniel Kárpáti and published by . This book was released on 2024-02-29 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: The Family Firm provides a comprehensive literature review of the heterogeneous characteristics of family firms based on over 400 recent and relevant academic articles. The review of the literature is organized around five main topics: business and family values, succession, family firm strategies, family ownership and governance, and financial policies. The literature review is supplemented with the analysis of a detailed survey of more than 900 Dutch family firms. This empirical analysis serves to illustrate that family firms indeed exhibit substantial heterogeneity along the five main topics considered in the review. In addition, the empirical analysis also highlights that different dimensions of heterogeneity are often strongly correlated. This monograph advances our understanding of family firms by taking stock of extant work and highlighting important research gaps. There are important practical implications in that the heterogeneous nature of family firms might make overly broad regulatory actions ineffective. Policymakers should take an interest in this work as it allows them to accommodate specific regulations to the intended subset of family firms. The findings should also interest family entrepreneurs and investors in family firms by providing a general theoretical and practical overview of how family firms differ from each other and under which circumstances specific actions, organizational strategies, and corporate behavior might have heterogeneous effects.