Ownership Structure And Investor Protection
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Ownership Structure And Investor Protection
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Author : Marco Klapper
language : en
Publisher: GRIN Verlag
Release Date : 2012-06-22
Ownership Structure And Investor Protection written by Marco Klapper and has been published by GRIN Verlag this book supported file pdf, txt, epub, kindle and other format this book has been release on 2012-06-22 with Business & Economics categories.
Bachelor Thesis from the year 2012 in the subject Business economics - Business Management, Corporate Governance, grade: 1,3, University of Tubingen, language: English, abstract: It is the purpose of this paper to examine to what extent ownership structure can alleviate the agency problem and limit managerial expropriation of small shareholders. Since stock options and other forms of equity are frequently used as compensation for managers, special emphasis is placed on the question of how managerial ownership can affect agency costs and firm value. To evaluate the impact of ownership patterns on shareholder value, this paper surveys and reinterprets scientific advances in the corporate governance literature. A significant part of the analysis covers the interrelation of inside ownership, corporate policies, and shareholder value; as well as the role of endogeneity.
Postprivatization Corporate Governance The Role Of Ownership Structure And Investor Protection
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Author : Narjess Boubakri
language : en
Publisher:
Release Date : 2003
Postprivatization Corporate Governance The Role Of Ownership Structure And Investor Protection written by Narjess Boubakri and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2003 with Environmental economics categories.
Investor Protection And Corporate Governance
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Author : Alberto Chong
language : en
Publisher: World Bank Publications
Release Date : 2007-06-26
Investor Protection And Corporate Governance written by Alberto Chong and has been published by World Bank Publications this book supported file pdf, txt, epub, kindle and other format this book has been release on 2007-06-26 with Business & Economics categories.
'Investor Protection and Corporate Governance' analyzes the impact of corporate governance on firm performance and valuation. Using unique datasets gathered at the firm-level the first such data in the region and results from a homogeneous corporate governance questionnaire, the book examines corporate governance characteristics, ownership structures, dividend policies, and performance measures. The book's analysis reveals the very high levels of ownership and voting rights concentrations and monolithic governance structures in the largest samples of Latin American companies up to now, and new data emphasize the importance of specific characteristics of the investor protection regimes in several Latin American countries. By and large, those firms with better governance measures across several dimensions are granted higher valuations and thus lower cost of capital. This title will be useful to researchers, policy makers, government officials, and other professionals involved in corporate governance, economic policy, and business finance, law, and management.
Market Value Maximizing Ownership Structure When Investor Protection Is Weak
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Author : Beni Lauterbach
language : en
Publisher:
Release Date : 2008
Market Value Maximizing Ownership Structure When Investor Protection Is Weak written by Beni Lauterbach and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2008 with categories.
We hypothesize that in a country with lax corporate governance rules Tobin's Q is maximized when controlholders' vote approaches the supermajority level. In this holding range controlholders do not possess extreme power (cannot pass supermajority decisions), nor do they feel a strong temptation to loot the firm (which largely belongs to them). Using a sample of 144 Israeli firms, we find that Tobin's Q is maximized when control group vote reaches 67%. This evidence is strong when ownership structure is treated as exogenous and weak when it is considered endogenous. Other ownership structure variables do not appear to have a significant valuation effect.
Investor Protection And Financial Structure
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Author : Erica X. N. Li
language : en
Publisher:
Release Date : 2007
Investor Protection And Financial Structure written by Erica X. N. Li and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2007 with categories.
Both shareholder protection and creditor protection are considered in a general equilibrium model with two competing technologies. Entrepreneurs are wealth-constrained and resort to banks and the equity market for external financing. The economy's financial structure is determined by the relative quality of shareholder protection and creditor protection. The coexistence of banks and the equity market is shown to be beneficial. The external financing preference of a firm follows the pecking order with limited debt capacity. Better creditor protection leads to larger debt capacity. I show that the ownership structure has a hump-shape relation with the quality of shareholder protection. Ownership is more concentrated with better creditor protection and in firms with wealthier entrepreneurs. The market return and entrepreneurial activities weakly increase with the quality of both shareholder protection and creditor protection. Increases in shareholder protection lower the firm values for firms that use sufficiently small amount of equity financing.
The Complex Relationship Of Concentrated Ownership Structures And Corporate Governance
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Author : Vasiliki Stergiou
language : en
Publisher:
Release Date : 2011
The Complex Relationship Of Concentrated Ownership Structures And Corporate Governance written by Vasiliki Stergiou and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2011 with categories.
Concentrated ownership is perceived as an inefficient form of ownership because it allegedly increases the risk of minority expropriation, which is further exacerbated by the disproportionality of control and cash-flow rights of the controller. This thesis challenges the perception of concentration as a per se inefficient ownership structure. It argues that the 'inefficiency bias' is based on the oversimplified, incorrect assumption that concentration is characterised by the presence of one controlling shareholder and therefore disregards the variety of the forms of concentration. To substantiate this argument, this thesis categorises the forms of concentration based on the identity and number of the controllers and examines their impact on corporate governance. It is shown, that the distinct characteristics of the varieties of shareholders' profiles have an ambivalent impact on corporate governance: Families are strongly committed investors but also prone to extract private benefits of control; the state is inefficient in monitoring but can also be a driver of good corporate governance practices; multiple large shareholders improve internal contestability of control but shareholders' agreements can also be used for minority expropriation. In this context, the effectiveness of the legal framework to mitigate the arising corporate governance problems becomes the key factor which differentiates efficient from inefficient corporate ownership structures. The different corporate governance problems of concentration imply that adapted legal solutions and adequately flexible rules are the prerequisites of effective investor protection. Given the varieties of concentration, legal effectiveness and strong investor protection can therefore only be defined by reference to a given ownership structure. This thesis presents concrete examples of investor protection mechanisms which are adapted to the distinct characteristics of the varieties of concentration: In the case of family and state ownership, effective minority protection takes the form of special minority rights of board-representation; within multiple large blockholdings, shareholders' agreements limit the abuse of the governance rights of majority shareholders. Ultimately, the thesis deals with the implications of this complex interaction between ownership structures and corporate governance which compromise the reliability of indices as a metric of the quality of corporate governance, to the extent that the applied methodology fails to encompass the differences in shareholders' profiles and that a functional approach to the substantive legal analysis preceding the compilation of an index is not adopted.
Corporate Governance And Dividend Policy When Investor Protection Is Weak
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Author : Morad Abdel-Halim
language : en
Publisher:
Release Date : 2014
Corporate Governance And Dividend Policy When Investor Protection Is Weak written by Morad Abdel-Halim and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2014 with categories.
We investigate the relationship between firm's dividend policy and the corporate governance mechanism, measured by firm's ownership structure, in an emerging market characterized by weak corporate governance system and ineffective law enforcement. Evidence is drawn from non financial corporations over the period 2004-2008 using several econometric models with different specifications that account for firm-specific unobservable variables. We find a significant negative relationship between firm's dividend payout ratio and its percentage of capital owned by blockholders. This result implies that large shareholders are either expropriating the rights of minority shareholders or that firm's earnings are being used to finance its future investments. Our results support the first implication as we find that the negative impact of large shareholders' capital stake on dividend payments is robust and unchanged when firm's sales growth is controlled for.
Governance With Poor Investor Protection
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Author : Paolo Volpin
language : en
Publisher:
Release Date : 2002
Governance With Poor Investor Protection written by Paolo Volpin and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2002 with Chief executive officers categories.
The Role Of Market Control On The Relation Between Ownership And Performance
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Author : Bengi Ozer
language : en
Publisher:
Release Date : 2001
The Role Of Market Control On The Relation Between Ownership And Performance written by Bengi Ozer and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2001 with categories.
The evidence of highly concentrated ownership structure in companies that have exposed themselves to market discipline illustrates a confusing structure of corporate governance. The disciplinary effect of the market is questioned in a context with concentrated ownership structure and poor investor protection. We explore whether the presence and magnitude of market control leads to differences in performance in the case of concentrated ownership structure. We explore how the presence and the magnitude of widely held ownership influence the different dimensions of performance in companies with concentrated ownership. We further investigate whether the differences in the identity of the controlling shareholder influences impact of market control on the performance of these firms. Companies trading in the Istanbul Stock Exchange as of 1999 constitute the sample of the study. The findings indicate the presence of a highly concentrated ownership structure in the Turkish market. The results of the regression analyses seem to indicate that the market control (dispersed ownership percentage) influences certain dimensions of performance but not in the expected direction. Market control does not seem to have any disciplinary effects on performance in concentrated companies. Identity of the controlling shareholder seems to have a profound effect on the performance. Controlling shareholders types that operate through a portfolio of other companies seem to have favorable influence on performance. Significant relationship between debt pressure and performance might be indicating the disciplinary pressure of the debt holders. The findings imply a potential disciplinary impact of stakeholders rather than shareholders or market. The study also provides supportive evidence for the impact of context on the relation between ownership and performance.
The Principle Of Proportional Ownership Investor Protection And Firm Value In Western Europe
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Author : Morten Bennedsen
language : en
Publisher:
Release Date : 2006
The Principle Of Proportional Ownership Investor Protection And Firm Value In Western Europe written by Morten Bennedsen and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2006 with categories.
Previous research initiated by Claessens et al. (2002) has established a value discount of disproportional ownership structures. Due to omitted variables problems it is difficult to provide a causal interpretation of these findings. We provide a thorough analysis of this value discount in a large sample of Western European firms, which strengthens the causal interpretation that the discount is driven by incentive and entrenchment effects. First, we show that the value discount is higher in firms with low cash flow concentration, in family firms, in industries with higher amenity value and in countries with better investor protection. Second, we show that these findings are consistent with the predictions of a theoretical model of incentive and entrenchment effects. Third, we find little empirical evidence for a number of alternative omitted variable explanations, including: protection of private benefits; voting and block premia; low-liquidity discount; and, protection against uninvited takeovers. Fourth, we present the puzzling finding that the value discount is significantly higher in firms with dual class shares than in firms with pyramidal ownership. Fifth, we find no impact of disproportional ownership structures on operating performance. Finally, we discuss policy implications of these findings in relationship to the ongoing process of harmonization of the European capital markets.