Determinants of engaging in business combinations through partial acquisitions

Lopes, Ana Isabel; Lourenço, Isabel

doi:10.1080/02102412.2014.910911

Cited by 3 publications

(9 citation statements)

References 54 publications

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“…The United Kingdom has the lowest proportion of firms reporting NCIs (22%), followed by Sweden (30%), Germany (52%), Greece (54%) and France (70%). These results are consistent with the findings of Lopes and Lourenço (2014). 4…”

Section: Methodssupporting

confidence: 93%

Is the relation between non-controlling interests and parent companies misleading?

Lopes¹,

Lourenço

Soliman

et al. 2020

Australian Journal of Management

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This article investigates whether different levels of investor protection affect the equity market’s valuation of non-controlling interests (NCIs) in a consolidated corporate entity. Using a set of publicly listed European firms, our findings suggest a positive (negative) association of NCIs with parent companies’ share prices in countries with low (high) levels of investor protection. We interpret the findings as evidence that when non-controlling investors are not well-protected, parent companies have an opportunity to extract rents from non-controlling owners, leading to a positive valuation of NCIs’ equity. However, in countries where non-controlling investors are well-protected, parent companies are not able to extract rents but still must monitor and govern the related subsidiary; thus, NCIs become a net cost, and the relation inverts. JEL Classification: M41, M48

show abstract

Section: Methodssupporting

confidence: 93%

Is the relation between non-controlling interests and parent companies misleading?

Lopes¹,

Lourenço

Soliman

et al. 2020

Australian Journal of Management

Self Cite

View full text Add to dashboard Cite

show abstract

“…The United Kingdom has the lowest proportion of firms reporting NCIs (22%) followed by Sweden (30%), Germany (52%), Greece (54%), and France (70%). These results are consistent with the findings of Lopes and Lourenço (2014) 4 . Panel C of Table 3 presents the results of independent sample ttests to describe differences between firms with and without NCIs.…”

Section: [Table 3]supporting

confidence: 93%

“…To analyse our sample firms' decisions to engage in partial acquisitions (first stage of the Heckman procedure), we use a binary logit model in which the dependent variable equals 1 for firms with NCIs and 0 for the firms that do not rely on NCIs as a source of finance for the group's activities. Following prior studies, such as Lopes and Lourenço (2014) and Lopes et al 2013, we predict that the decision to engage in partial acquisitions (recognizing NCI)…”

Section: Methodsmentioning

confidence: 80%

“…Prior studies were almost exclusively conducted in a single-country setting resulting in a dearth of cross-country research on this topic. One exception is Lopes and Lourenço (2014), who found empirical evidence that firm-level and country-level variables affect firms' decisions to engage in partial acquisitions. However, they focused on a different empirical question, which was not related to the market value of parent companies.…”

Section: [Table 1]mentioning

confidence: 99%

“…Lopes and Lourenço (2014) examined firm-level and country-level conditions affecting a company's decision to engage in partial acquisitions through the existence or non-existence of NCIs in 14 European countries. They found that size, leverage, profitability, cross-listing, internationalization and institutional characteristics play important roles in explaining the likelihood of engaging in a partial acquisition.…”

mentioning

confidence: 99%

See 2 more Smart Citations

Is the Relation between Non-Controlling Interests and Parent Companies Misleading?

Lopes,

Lourenno,

Soliman

2015

SSRN Journal

View full text Add to dashboard Cite

This paper investigates whether different levels of investor protection affect the equity market's valuation of non-controlling interests (NCIs) in a consolidated corporate entity. Using a set of publicly listed European firms, our findings suggest a positive (negative) association of NCIs with parent companies' share prices in countries with low (high) levels of investor protection. We interpret the findings as evidence that when non-controlling investors are not well-protected, parent companies have an opportunity to extract rents from noncontrolling owners, leading to a positive valuation of NCIs' equity. However, in countries where non-controlling investors are well-protected, parent companies are not able to extract rents but still must monitor and govern the related subsidiary; thus, NCIs become a net cost, and the relation inverts.

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Ownership of Corporations

Boyd

Solarino

2016

Journal of Management

134

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The ownership of corporations has been studied in multiple disciplines and using diverse theoretical frameworks for several decades. Despite a wealth of research, both research gaps and contradictory findings are common. This is partly due to the fragmentation of the foci of individual studies. We synthesize the work done to date through a content analysis of 145 articles and 523 effect size estimates. On the basis of this review, we develop an integrated perspective to understand how institutional, government, family, executive, and board ownership affect a variety of firm outcomes. We conclude by offering new theoretical and contextual directions to better understand the role of ownership in shaping firm outcomes.

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Determinants of engaging in business combinations through partial acquisitions

Cited by 3 publications

References 54 publications

Is the relation between non-controlling interests and parent companies misleading?

Is the relation between non-controlling interests and parent companies misleading?

Is the Relation between Non-Controlling Interests and Parent Companies Misleading?

Ownership of Corporations

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