Corporate Finance and Organizations eJournal最新文献

{"title":"Pyramidal Groups and the Separation Between Ownership and Control in Italy","authors":"Marc Bianchi, M. Bianco, L. Enriques","doi":"10.2139/SSRN.293882","DOIUrl":"https://doi.org/10.2139/SSRN.293882","url":null,"abstract":"The paper provides an overview of the Italian corporate governance system, focusing mainly on the ownership of Italian firms and on the legal and institutional framework. Like those of most other continental European countries, the Italian corporate governance system features a high concentration of direct ownership, for both unlisted and listed companies; at first glance this suggests a very limited degree of separation between ownership and control. The analysis of direct ownership and of the identity of owners reveals that a major role is played by families, coalitions, the State, and above all by other companies: the largest stake in listed and unlisted companies is held by other non-financial or holding companies. In fact, more than 50 percent of all Italian industrial companies belong to pyramidal groups. Taking the pyramidal structure into account, one can identify ultimate owners and evaluate the actual degree of separation between ownership and control. Measuring separation as the amount of capital controlled per unit of capital owned, we find that in 1996 the average figure was 2.4 for listed companies; it was higher for private non-banking groups (4.5) and lower for State-controlled groups (1.6); for the ten largest private groups, the ratio was approximately 5. In Italy, then, pyramidal groups headed by families, coalitions, or the State have supplanted other forms of separation, whereas financial institutions have played a very limited role in fostering separation. This structure, reinforced by cross-ownership, circular ownership, and interlocking directorates, has allowed stable control over both small and large companies, with few control changes, especially hostile takeovers. The paper first provides a brief description of the legal and institutional framework and in particular of the provisions affecting corporate governance mechanisms (shareholders' rights, directors' liability etc.), and of disclosure rules. Next comes a quantitative description for listed and unlisted companies: ownership structure, taking account of groups; the control structure; the diffusion of pyramidal groups; and an evaluation of the separation between ownership and control. This is followed by a discussion of changes and trends: the simplification of the pyramidal structure due to privatization and to the financial difficulties of private groups; the increasing role of financial institutions; the debate that has led to reform of some corporate governance mechanisms and to a new law for listed companies, in force since July 1998.","PeriodicalId":272257,"journal":{"name":"Corporate Finance and Organizations eJournal","volume":"18 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2010-01-19","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"128170721","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"Are Some Outside Directors Better than Others? Evidence from Director Appointments by Fortune 1000 Firms","authors":"Eliezer M. Fich","doi":"10.1086/431448","DOIUrl":"https://doi.org/10.1086/431448","url":null,"abstract":"I analyze 1,493 first-time director appointments to Fortune 1000 boards, during 1997-99, to investigate whether certain outside directors are better than others. Reactions to director appointments are higher when appointees are CEOs of other companies than when they are not. CEOs are more likely to obtain outside directorships when the companies they head perform well. Well-performing CEOs are also more likely to gain directorships in organizations with growth opportunities. Because, for these firms, a large portion of their value hinges upon realizing their growth potential, I conclude that CEOs are sought as outside directors to enhance firm value.","PeriodicalId":272257,"journal":{"name":"Corporate Finance and Organizations eJournal","volume":"1 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2005-09-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"121332215","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"Winner Take All: Competition, Strategy, and the Structure of Returns in the Internet Economy","authors":"T. Noe, Geoffrey G. Parker","doi":"10.2139/ssrn.250371","DOIUrl":"https://doi.org/10.2139/ssrn.250371","url":null,"abstract":"In this paper, we develop an economic rationale for the following stylized fact: Web-based firms spend profligately on advertising and marketing and usually lose money. Our rationale is based on the winner-take-all structure of high fixed cost, low marginal cost, markets for information goods. This market structure ensures that market participation and investment policy are highly stochastic. Moreover, if a firm chooses to participate in a Web market, it is optimal to act very aggressively through saturation advertising. Although increases in advertising costs reduce the probability of entry, once the decision to enter is made, firm strategies are insensitive to advertising price. Consistent with empirical studies of the profitability of internet firms (Hand, 2001), our model predicts returns that are highly positively skewed, that is, even the firms that survive the competition for market position have a small chance of huge gains combined with a large probability of very modest returns. In dynamic competition, firms weakened by early rounds are less likely to challenge in subsequent rounds. However, when a challenge is attempted, it is always aggressive. In addition, because large expenditures in the first period produce valuable strategic real options in later periods, which are treated as expenses using traditional accounting methodology, the financial valuation of Internet firms may actually be negatively related to performance when using standard accounting measures of profitability that fail to capitalize these strategic real options.","PeriodicalId":272257,"journal":{"name":"Corporate Finance and Organizations eJournal","volume":"65 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2005-06-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"114949810","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"Global Trends in IPO Methods: Book Building vs. Auctions with Endogenous Entry","authors":"Ann E. Sherman","doi":"10.2139/ssrn.276124","DOIUrl":"https://doi.org/10.2139/ssrn.276124","url":null,"abstract":"The U.S. book building method has become increasingly popular for initial public offerings (IPOs) worldwide over the last decade, whereas sealed bid IPO auctions have been abandoned in nearly all of the many countries in which they have been tried. I model book building, discriminatory auctions and uniform price auctions in an environment where the number of investors and the accuracy of investors' information is endogenous. Book building lets underwriters manage investor access to shares, allowing them to: 1) reduce risk for both issuers and investors; and 2) control spending on information acquisition, thereby limiting either underpricing or aftermarket volatility. Since more control and less risk are beneficial to all issuers, the advantages of book building's allocational flexibility may explain why global patterns of issuer choice are surprisingly consistent. My models also predict that offerings with higher expected underpricing will have lower expected aftermarket volatility; that an auction open to large numbers of potential bidders is vulnerable to inaccurate pricing and fluctuations in the number of bidders; and that both book built and auctioned IPOs will exhibit partial adjustment to public information.","PeriodicalId":272257,"journal":{"name":"Corporate Finance and Organizations eJournal","volume":"55 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2004-12-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"134043575","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"Capital Structure and Managerial Compensation: The Effects of Remuneration Seniority","authors":"R. Calcagno, L. Renneboog","doi":"10.2139/ssrn.249040","DOIUrl":"https://doi.org/10.2139/ssrn.249040","url":null,"abstract":"We show that the relative seniority of debt and managerial compensation has important implications on the design of remuneration contracts.Whereas the traditional literature assumes that debt is senior to remuneration, we show that this is frequently not the case according to bankruptcy regulation and as observed in practice.We theoretically show that including risky debt changes the incentive to provide the manager with stronger performance-related incentives (\"contract substitution\" effect).If managerial compensation has priority over the debt claims, higher leverage produces lower powerincentive schemes (lower bonuses) and a higher base salary.With junior compensation, we expect more emphasis on pay-for-performance incentives.The empirical findings are in line with the regime of remuneration seniority as the base salary is significantly higher and the performance bonus is lower in financially distressed firms.","PeriodicalId":272257,"journal":{"name":"Corporate Finance and Organizations eJournal","volume":"1 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2004-09-16","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"129510965","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"Managerial Fiduciary Duty and Social Responsibility: The Changing Nature of Corporate Governance in Post-War America","authors":"Ernie Englander, A. Kaufman","doi":"10.2139/SSRN.472965","DOIUrl":"https://doi.org/10.2139/SSRN.472965","url":null,"abstract":"Enron's demise and the corporate investigations that ensued have reinvigorated the debate on managerial fiduciary duty. Some have argued that the recent stock bubble and the ensuing revelations of managerial malfeasance merely repeat history: Capitalism regularly corrects market exuberance and redirects resources along an efficient path. True, each bubble has its particular causes. The most recent one arose in concert with over-investment in high technology and recently deregulated industries. Those who claim that the 1990s bubble marked a significant change point to evidence that Enron's practice of misreporting information to bolster performance figures and executive stock option values extended widely within the corporate sector. In this view, excess was connected to stock option incentive systems that allowed these managers to exploit information asymmetry between themselves and investors. Even Alan Greenspan, the Chairman of the Federal Reserve Bank, expressed this view when he openly questioned the market's ability to disperse information in an accurate and timely manner and the wisdom of reporting rules that did not demand that stock options be included as business expenses. In this essay, we elaborate this theme - that the stock market's deflation exposed a structural reworking of managerial incentive hierarchies and managerial ideology. During the 1990s, U.S. managerial capitalism underwent a profound transformation from a technocratic system to a proprietary one. In the former, managers functioned as teams to sustain the firm and to promote social welfare. In the latter, corporate bureaucratic teams broke up into tournaments in which managers competed for advancement toward the CEO prize. Because their reward system depended heavily on stock options that were accompanied by downside risk-protection, these tournaments turned managers into a special class of shareholders. And, like any other shareholder, managers sought to maximize their individual utility functions - even if it deviated from the firm's best interest. Once this new regime became established practice, managers discarded their technocratic, stakeholder creed and adopted a property rights ideology, originally elaborated in academia by financial agency theorists.","PeriodicalId":272257,"journal":{"name":"Corporate Finance and Organizations eJournal","volume":"13 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2003-12-11","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"128427231","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"Determinants of the Size and Structure of Corporate Boards: 1935-2000","authors":"Sukesh Patro, K. Lehn, Mengxin Zhao","doi":"10.2139/ssrn.470675","DOIUrl":"https://doi.org/10.2139/ssrn.470675","url":null,"abstract":"We argue that the size and composition of corporate boards are determined by tradeoffs involving the information that directors bring to boards versus the coordination costs and free rider problems associated with their additions to boards. Our hypotheses lead to predictions that firm size and growth opportunities are important determinants of these board characteristics. Using a sample of 82 U.S. firms that survived over the period of 1935 through 2000, we find strong support for the hypotheses. The hypotheses also find support in the relation between changes in board size and firms' merger and divestiture activity, and changes in the geographical diversification of firms. We find no robust relation between firm performance and either board size or composition after accounting for the determinants of these board characteristics.","PeriodicalId":272257,"journal":{"name":"Corporate Finance and Organizations eJournal","volume":"40 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2003-11-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"116621493","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"Why Do Firms Announce Open Market Repurchase Programs","authors":"Jacob Oded","doi":"10.2139/ssrn.291164","DOIUrl":"https://doi.org/10.2139/ssrn.291164","url":null,"abstract":"Empirically, a price increase accompanies the announcement of an open-market stock repurchase program, even though the announcement is not a commitment. In fact, for many announced programs no shares are ever actually repurchased. This article explores this puzzle. In the single-firm-type version of the model, the option that a firm grants itself by announcing a program does not generate announcement returns. In equilibrium, long-run gains from the informed trading that the option creates are offset by short-run costs from the market's accounting for this adverse selection. Based on this trade-off, I construct a signaling (two-type) model that can deliver announcement returns. In the separating equilibrium, good firms do not incur any cost when they announce programs. Their gains from informed trading in the long run offset the cost of announcement incurred in the short run. Mimicry is costly, because a bad firm's long-run gains from informed trading cannot compensate for the short-run cost of announcing. Copyright 2005, Oxford University Press.","PeriodicalId":272257,"journal":{"name":"Corporate Finance and Organizations eJournal","volume":"36 4","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2003-08-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"120909438","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"Corporate Diversification: What Gets Discounted?","authors":"S. Mansi, D. Reeb","doi":"10.2139/ssrn.286902","DOIUrl":"https://doi.org/10.2139/ssrn.286902","url":null,"abstract":"Prior literature finds that diversified firms sell at a discount relative to the sum of the imputed values of their business segments. We explore this documented discount and argue that it stems from risk-reducing effects of corporate diversification. Consistent with this risk-reduction hypothesis, we find that (a) shareholder losses in diversification are a function of firm leverage, (b) all equity firms do not exhibit a diversification discount, and (c) using book values of debt to compute excess value creates a downward bias for diversified firms. Overall, the results indicate that diversification is insignificantly related to excess firm value. Copyright The American Finance Association 2002.","PeriodicalId":272257,"journal":{"name":"Corporate Finance and Organizations eJournal","volume":"31 10","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2002-10-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"132645133","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"Legal Protection, Corporate Governance and Information Asymmetry in Emerging Financial Markets","authors":"F. Gul, Hanqing Qiu","doi":"10.2139/ssrn.298169","DOIUrl":"https://doi.org/10.2139/ssrn.298169","url":null,"abstract":"This paper, using observations from firms in emerging financial markets (EFM), examines the association between proxies for legal protection, law enforcement and corporate governance on country level scores for information asymmetry (IA). In addition, the paper also examines the association between differences in financial development of EFM and IA. IA is measured using a method developed by Jacobson and Aaker (1993) who argued that stock market participants, being forward-looking, not only react to information about business performance but also attempt to anticipate outcomes that will only later be reflected in accounting information. The measure applied seeks to assess the degree to which investors have information that allows them to anticipate future accounting results versus the extent that they react to current-term accounting results. Regression results show that firms in countries with strong legal protection/law enforcement and corporate governance are associated with lower IA. Firms in countries with more developed markets are also associated with lower IA levels.","PeriodicalId":272257,"journal":{"name":"Corporate Finance and Organizations eJournal","volume":"1 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2002-02-08","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"130315160","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}