Download or read book Ownership Control Discrepancy and Firm Value written by Sabri Boubaker and published by . This book was released on 2007 with total page 36 pages. Available in PDF, EPUB and Kindle. Book excerpt: The purpose of this study is to provide an empirical analysis of the relationship between ownership structure of French firms and their value. Using data for 510 French publicly traded firms, the current study provides evidence in support of the entrenchment hypothesis. The results show that large controlling shareholders maintaining grip on control while holding only small fraction of cash flow rights are inclined to expropriate minority shareholders, which in turn detrimentally affects the firm's valuation. The evidence also indicates that pyramiding is the main device set to unduly entrench the large controlling shareholder. Additional analysis reveals that the identity of the second largest controlling shareholder matters. Sharing control with a family constrains the largest controlling shareholder to steer clear of self-serving behavior. However sharing control with a widely held firm or with a financial institution fosters this self-serving behavior.

Download or read book Ownership Structure and Firm Value written by Soodong Kim and published by . This book was released on 2005 with total page 194 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book The Relationship Between Management Ownership and Firm Value written by Adam Khalfalla and published by . This book was released on 2010 with total page 78 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book The Control of Corporate Europe written by Fabrizio Barca and published by OUP Oxford. This book was released on 2001-11-15 with total page 354 pages. Available in PDF, EPUB and Kindle. Book excerpt: Written by an international team of authors, this book provides the first systematic account of the control of corporate Europe based on voting block data disclosed in accordance with the European Union's Large Holdings Directive (88/627/EEC). The study provides detailed information on the voting control of companies listed on the official markets in Austria, Belgium, France, Germany, Italy, the Netherlands, Spain, Sweden, the United Kingdom, and, as a benchmark comparison, the United States. The authors record a high concentration of control of corporations in many European countries with single blockholders frequently controlling more than fifty per cent of corporate votes. In contrast, a majority of UK listed companies have no blockholder owning more than ten per cent of shares, and a majority of US listed companies have no blockholder with more than six per cent of shares. Those chapters devoted to individual countries illustrate how blockholders can use legal devices to leverage their voting power over their cash-flow rights, or how incumbents prevent outsiders from gaining voting control. It is shown that the cultural and linguistic diversity of Europe is (almost) matched by its variety of corporate control arrangements.

Download or read book Corporate Ownership and Control written by Shalini Perera and published by World Scientific. This book was released on 2011 with total page 446 pages. Available in PDF, EPUB and Kindle. Book excerpt: The governance of companies is of importance to developing countries due to the link between effective corporate governance and economic development. Ownership and control of public companies, except in the US and UK, is often in the hands of a few individuals, families or corporate groups and impact on corporate governance and economic development.Using Sri Lanka as an illustrative example, Corporate Ownership and Control sets out the implications of corporate ownership and control structures on the governance of companies, and suggests a reform agenda to meet the challenges posed by such structures. Any analysis into the reform of corporate governance in developing countries should begin with a focus on the local market structures that define its adaptation and effectiveness. The issues explored in the book provide an insight into ownership and control structures in Sri Lanka, the costs and benefits of such structures, and the necessary reform framework to promote effective corporate governance. The analysis can be used to both understand the impact of ownership structures on corporate governance, and suggest how corporate governance issues arising from such structures should be resolved in order to promote economic development and growth.

Download or read book The SAGE Handbook of Family Business written by Leif Melin and published by SAGE. This book was released on 2013-11-15 with total page 697 pages. Available in PDF, EPUB and Kindle. Book excerpt: The SAGE Handbook of Family Business captures the conceptual map and state-of-the-art thinking on family business - an area experiencing rapid global growth in research and education since the last three decades. Edited by the leading figures in family business studies, with contributions and editorial board support from the most prominent scholars in the field, this Handbook reflects on the development and current status of family enterprise research in terms of applied theories, methods, topics investigated, and perspectives on the field′s future. The SAGE Handbook of Family Business is divided into following six sections, allowing for ease of navigation while gaining a multi-dimensional perspective and understanding of the field. Part I: Theoretical perspectives in family business studies Part II: Major issues in family business studies Part III: Entrepreneurial and managerial aspects in family business studies Part IV: Behavioral and organizational aspects in family business studies Part V: Methods in use in family business studies Part VI: The future of the field of family business studies By including critical reflections and presenting possible alternative perspectives and theories, this Handbook contributes to the framing of future research on family enterprises around the world. It is an invaluable resource for current and future scholars interested in understanding the unique dynamics of family enterprises under the rubric of entrepreneurship, strategic management, organization theory, accounting, marketing or other related areas.

Download or read book Reexamining the Managerial Ownership Effect on Firm Value written by Bradley Warren Benson and published by . This book was released on 2006 with total page 452 pages. Available in PDF, EPUB and Kindle. Book excerpt: Managerial ownership levels change slowly over time. The slow change masks a significant ownership effect when testing the relation between managerial ownership and firm value using firm fixed effects to control for unobserved firm heterogeneity because of much smaller within variation than between variation. I demonstrate that using pay-performance semi-elasticity as a measure of managerial ownership incentives results in meaningful changes within firm over time. The greater within firm variation amplifies the effect size and increases the power to detect a relation between managerial ownership and firm value in firm fixed effects regressions. Using pay-performance semi-elasticity, I find a significant hump shaped relation between managerial ownership and Tobin's Q in firm fixed effects regressions and two-stage least squares regressions with firm fixed effects to control for endogeneity. My results contradict the results of previous studies which find no relation between managerial ownership and firm value in firm fixed effects regressions.

Download or read book Substitutability vs Complementarity Among Corporate Governance Mechanisms written by Diego C. Cueto and published by . This book was released on 2008 with total page 34 pages. Available in PDF, EPUB and Kindle. Book excerpt: Emerging economies are typically characterized by weak shareholders' protection and highly concentrated ownership structures which are relatively stable over time. With concentrated ownership, the conflict of interests shifts from the principal-agent problem to a dominant shareholders-minority shareholders focus. The conflict of interests between shareholders is characterized as the potential for asset diversion from the firm to dominant shareholders, reducing overall firm value. I analyze the effects of the discrepancy between voting rights and cash-flow rights for dominant shareholders and other governance mechanisms on firm value. Departing from previous literature I propose a detailed analysis of the identity of each shareholder. Voting rights and cash-flow rights are therefore aggregated only at the core of identified business groups. To minimize negative effects of ownership concentration on firm value, Latin-American firms resort to a number of different corporate governance mechanisms that are complements rather than substitutes. I find that while firm value do suffer market discounts due to the separation of ownership and control, blockholders detached from dominant shareholders assume monitoring roles and help curtailing asset expropriation. Although multiple-class shares are common in some countries, firms with a single class of shares are highly valued by market participants. I also find that Latin-American firms are underleveraged and that the benefits and costs imposed by the passing of the Sarbanes-Oxley act in year 2002 have already been incorporate in other governance mechanisms. Beyond the potential large private benefits of control, concentrated ownership may be prescribed in dynamic competitive environments. I explore the motivations for outside investors to take large stakes to finance the firm's activities, facing expropriation, illiquidity and under diversification risks.

Download or read book When Blockholders Leave Feet First written by Bang Dang Nguyen and published by . This book was released on 2013 with total page 37 pages. Available in PDF, EPUB and Kindle. Book excerpt: This study investigates the effect of ownership and control on firm value using exogenous variation resulting from stock price reactions to the sudden death of individual blockholders. Stock market reactions range from -5% to 4% for inside blockholders as ownership increases and from 0% to -2% for outside blockholders. The difference in market reactions identifies the value of ownership and control while effectively controlling for confounding effects on firm value due to liquidity or anticipated takeover activity. Overall, our results suggest that as ownership increases the beneficial effect of inside blockholders disappears while the beneficial effect of outside blockholders increases.

Download or read book Government Intervention Ownership Structure and Firm Value written by Markus Brendel and published by . This book was released on 2017 with total page 26 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper provides causal evidence on the effect of ownership structure on firm value and on the impact of large tax incentives on the divestiture decision of equity blockholders by exploiting a quasi-experimental policy change in Germany. The 2000 Tax Reduction Act repealed corporate shareholders from capital gains taxation, whereas individual shareholders experienced only minor tax reductions. We show that stronger tax incentives to dispose shares do not necessarily reduce ownership concentration in the presence of strategic value premia as we find an increase in ownership concentration in firms controlled by a (tax exempt) corporate investor in response to the tax repeal. As the general policy of the German government was aiming at a more active market for corporate control via a more dispersed ownership structure, this result is not in line with the intentions of the policy makers. With respect to the relation between ownership structure and firm value the results from our difference-in-differences estimation suggest that the tax repeal was effective in removing market frictions and allowing for a more efficient shareholder structure: we find a positive relationship between ownership concentration and firm value.

Download or read book Management Ownership and Firm s Value written by Sang-Mook Lee and published by . This book was released on 2003 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: Demsetz and Lehn (1985), Morck, Shleifer, and Vishny (1988), and McConnell and Servaes (1990) report different empirical findings regarding ownership structure and corporate profitability. In this paper, we re-estimate the relation between management ownership and firm's value after controlling for the history of management ownership as well as inter-firm differences using panel data. Further, we consider the possibility that the current ownership structure is jointly determined with the firm value, an endogeneity argument a la Demsetz (1983). We find that history of the management ownership, not its current level, matters in determining the firm value, which is consistent with information asymmetry arguments.

Download or read book Managerial Ownership Change and Firm Value written by Moon H. Song and published by . This book was released on 1999 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: This study explores the relation between managerial ownership and firm value by examining a sample of firms that announce dual class recapitalizations and the insider trading activity that precede these announcements. Insider trading activity, unlike the recapitalization, requires managers to commit their personal wealth and therefore serves as an indicator of the motivation behind the recapitalization. The recapitalization, in effect, allows managers to magnify the increase in vote ownership that results from insider buying and offsets the reduction in vote ownership that results from insider selling. This study adds to our understanding of dual class recapitalizations by linking the wealth effects and changes in ownership concentration with manager-shareholder agency issues that result from the recapitalization and insider trading activity. Results show a positive relation between the change in firm value and ownership for recapitalizations before the 1984 New York Stock Exchange moratorium on delisting dual class firms when ownership was high and control was firmly established. A negative relation exists for recapitalizations since 1984 when ownership levels were lower and voting control not assured. Results support the notion that more recent recapitalizations entrenched managers.

Download or read book How Does Ownership Structure Affect Firm Value A Comparison Using Different Corporate Governance Systems written by Alberto de Miguel and published by . This book was released on 2009 with total page 32 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper studies how the main institutional factors characterizing corporate governance systems around the world affect the relationship between ownership structure and firm value. Our study gives rise to the following findings. First, ownership concentration and insider ownership levels are determined by several institutional features such as investor protection, development of capital markets, activity of the market for corporate control, and effectiveness of boards. Second, the relationship between ownership concentration and firm value is not directly affected by these institutional factors. Third, there is, however, a direct influence of corporate governance characteristics on the relationship between insider ownership and firm value.

Download or read book Managerial Ownership Dynamics and Firm Value written by Rüdiger Fahlenbrach and published by . This book was released on 2010 with total page 49 pages. Available in PDF, EPUB and Kindle. Book excerpt: From 1988 to 2003, the average change in managerial ownership is significantly negative every year for American firms. We find that managers are more likely to significantly decrease their ownership when their firms are performing well and more likely to increase their ownership when their firms become financially constrained. When controlling for past stock returns, we find that large increases in managerial ownership increase q. This result is driven by increases in shares held by officers, while increases in shares held by directors appear unrelated to changes in firm value. There is no evidence that large decreases in ownership have an adverse impact on firm value. We rely on the dynamics of the managerial ownership/firm value relation to mitigate concerns in the literature about the endogeneity of managerial ownership.

Download or read book Managerial Ownership Dynamics and Firm Value written by Rüdiger Fahlenbrach and published by . This book was released on 2007 with total page 47 pages. Available in PDF, EPUB and Kindle. Book excerpt: From 1988 to 2003, the average change in managerial ownership is significantly negative every year for American firms. The probability of large decreases in ownership is strongly increasing in contemporaneous and past stock returns but the probability of large increases in ownership through managerial purchases of shares is not. The relation between changes in Tobin's q and past and contemporaneous changes in ownership depends critically on controlling for past stock returns. When controlling for past stock returns, past large decreases in managerial ownership are unrelated to current changes in Tobin's q but there is some evidence that past large increases in managerial ownership are positively related to current changes in Tobin's q. Because managers sell shares when a firm's stock is performing well, large contemporaneous decreases in managerial ownership are associated with increases in Tobin's q. We argue that our evidence is mostly inconsistent with existing theories and propose a managerial discretion theory of ownership consistent with our evidence.

Download or read book Reexamining the Managerial Ownership Effect on Firm Value written by Bradley W. Benson and published by . This book was released on 2010 with total page 40 pages. Available in PDF, EPUB and Kindle. Book excerpt: Whether equity-based compensation and equity ownership aligns the interests of managers with stockholders is an important question in finance. Early studies found an inverted U-shaped relation between managerial ownership and firm value, but later studies using firm fixed effects found no relation. Managerial ownership levels change very slowly over time which may mask an ownership effect on firm value when using a fixed effect model. This is due to a much smaller within firm variation than between firm variation. We demonstrate that using pay-performance semi-elasticity, rather than pay-performance sensitivity as a measure of managerial ownership incentives, results in meaningful variation within firm over time. The greater within firm variation increases the power to detect a relation between managerial ownership and firm value with fixed effect regressions. As in the early research on this issue, we find a significant inverted U-shaped relation between managerial ownership and Tobin's Q in fixed effects regressions and after controlling for endogeneity with both two-stage and three-stage least squares regressions. Our results are consistent with incentive alignment at low levels and risk aversion at high levels of managerial ownership.

Download or read book Ownership Concentration and Firm Value written by Ekta Selarka and published by . This book was released on 2007 with total page 28 pages. Available in PDF, EPUB and Kindle. Book excerpt: The paper contributes to the understanding of corporate governance issues in emerging economies by examining the role of blockholders in influencing firm value. Using a much disaggregated and uniform database from Indian corporate sector for the year 2001, we present a deeper understanding of interaction between ownership structure and firm value in the following ways. Unlike most existing research which studies the aggregated level of ownership, we include a wider set of mechanisms, such as identity and ownership concentration of outside blockholders controlling at least 5% of total equity of the firm. We analyze the role played by these shareholders with substantial voting power in situations when equity holding is less vis-a-vis more concentrated in the hands of promoters. We also attempt to see if these investors coordinate among themselves to constrain the insiders from expropriating corporate resources. We find a significant curvilinear relationship between firm value and the fraction of voting rights owned by insiders. The curve slopes downward until the insider ownership reaches approximately between 45% and 63% and then slopes upward. Empirical results on ownership concentration by minority blockholders do not support the monitoring hypothesis of these investors. Furthermore, the coordinated behavior of largest two minority blockholders has value increasing (decreasing) impact on firm value when the collective control is located in the lower (higher) range. Coordination problem exacerbates if the largest two are private corporate bodies.