Blockholder ownership: Effects on firm value in market and control based governance systems

Thomsen, Steen; Pedersen, Torben; Kvist, Hans Kurt

doi:10.1016/j.jcorpfin.2005.03.001

Cited by 259 publications

(172 citation statements)

References 62 publications

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“…These results are consistent with the work of Kirchmaier and Grant (2005), Thomsen, Pedersen and Kvist (2006) who claimed that the impact of ownership concentration on performance is negative. We therefore concluded that the absence of a relationship between ownership concentration and performance, corroborates the neutrality thesis developed by Demsetz (1983), Demsetz and Lehn (1985) and Demsetz and Villalonga (2001).…”

Section: Resultssupporting

confidence: 92%

“…We note that capital concentration is significant and has a negative impact in regressions 1 and 2 which rejects our hypothesis H1 and corroborates, on the one hand, the work of Kirchmaier and Grant (2005), Thomsen, Pedersen and Kvist (2006) who argue that the impact of capital concentration on performance is negative. On the other hand, it confirms the results of the neutrality thesis as developed by Demsetz (1983), Demsetz and Lehn (1985) and Demsetz and Villalonga (2001).…”

Section: Study Of the Impact Of Ownership Structure On Value Creationsupporting

confidence: 83%

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Impact of Corporate Governance on Shareholder Value Creation: Evidence from Tunisian Context

Marouan¹,

Moez²

2015

IBR

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The aim of this study is to examine the impact of corporate governance on shareholder wealth. The emphasis here is placed on the hypothesis that separating ownership from management has a significant effect on shareholder value creation. The empirical analysis is based on a data set of Tunisian listed companies for the period 1997-2006. As predicted by theory, the results show that the presence of institutional investors in ownership structure seems to exercise effective control over the external manager. Capital concentration appears to have a negative effect respectively on performance and value creation. The presence of outside directors has a significant negative impact on value creation and performance of Tunisian firms.

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Section: Resultssupporting

confidence: 92%

Section: Study Of the Impact Of Ownership Structure On Value Creationsupporting

confidence: 83%

Impact of Corporate Governance on Shareholder Value Creation: Evidence from Tunisian Context

Marouan¹,

Moez²

2015

IBR

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“…The value of the operational profitability coefficient is positive and significant validating not only the relationship of reciprocity, but also the determinant role it has on ownership concentration. The results reveal the importance of operational profitability, namely in the previous period, on ownership concentration, as suggested by Hypothesis 4, which is consistent with previous empirical evidence (e.g., Thomsen, Pedersen, & Kvist, 2006). …”

Section: Insider Ownership and Corporate Operational Profitabilitysupporting

confidence: 91%

Are There Non-linear Relationships between Ownership Structure and Operational Performance? Empirical Evidence from Portuguese SMEs Using Dynamic Panel Data

Pinto¹,

Augusto

2014

IJBA

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This paper analyzes the causal relationship between the ownership concentration, insider ownership and operational performance using a sample of 4.163 Portuguese SMEs and panel data models. The main results show an endogenous and dynamic relationship between those variables. The quadratic specification established between ownership concentration and operational profitability suggests that for low levels of control rights the expropriation hypothesis prevails and for high levels the supervision hypothesis prevails. It was also possible to validate the effect of entrenchment and convergence of interests in the relationship established between the insider ownership and performance.

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“…This suspicion is confirmed by Thomsen et al (2003) who pointed out that blockholders might destroy firm value when studying firms in the largest continental European countries.…”

Section: Literature Reviewmentioning

confidence: 91%

Corporate Ownership Structure and Performance in Europe

Kirchmaier

Grant

2005

SSRN Journal

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In this paper, we show that ownership structures vary considerably across Europe and that ownership has a significant impact on firm performance. We observe that ownership structures in Europe are not consistent with value maximisation principles. Ultimately, our results show that dominant shareholders destroy value. These findings are in contradiction to similar research based on US samples. Our results remain robust after controlling for industry and country effects, liquidity, and the type of owner. We base our analysis on a new and unique dataset of uniform ownership data of the largest 100 firms in the five major European economies. We quantify the differences in ownership by comparing three distinct ownership structures of firms and relating them to performance. For the first time we employ a Hodrick-Prescott Filter, a methodology widely used in macroeconomics to isolate the trend growth components from cyclical fluctuations, to estimate the share price trend of each firm. We take this trend as a good indirect indicator of the quality of governance.JEL Classification: G32, G34, G38.

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Blockholder ownership: Effects on firm value in market and control based governance systems

Cited by 259 publications

References 62 publications

Impact of Corporate Governance on Shareholder Value Creation: Evidence from Tunisian Context

Impact of Corporate Governance on Shareholder Value Creation: Evidence from Tunisian Context

Are There Non-linear Relationships between Ownership Structure and Operational Performance? Empirical Evidence from Portuguese SMEs Using Dynamic Panel Data

Corporate Ownership Structure and Performance in Europe

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