Ownership structure, managerial behavior and corporate value

Davies, Jane; Hillier, David; McColgan, Patrick

doi:10.1016/j.jcorpfin.2004.07.001

Cited by 181 publications

(132 citation statements)

References 30 publications

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“…5 While previous results are predominantly derived from US data, also some international evidence exists. For the UK, Davies, Hillier, and McColgan (2005) find that the insider ownership to corporate value relationship is co-deterministic giving further evidence to the work of Himmelberg, Hubbard and Palia or Cho. For Japan, Chen, Guo, and Mande (2003) are able to find a positiv relation between insider ownership and firm performance, if they control for fixed effects.…”

Section: A Brief Review Of the Literaturementioning

confidence: 54%

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Insider ownership and corporate performance: evidence from Germany

Kaserer

Moldenhauer

2007

RMS

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in Evidence from Germany AbstractIn this paper we address the question whether insider ownership affects corporate performance. Evidence coming from studies dealing with Anglo-Saxon countries is rather inconclusive, especially because it seems that results are significantly affected by endogeneity. Economically, this is due to the fact that in these countries insider ownership seems to be mainly driven by management's compensation contracts. We argue that Germany is different in this regard, as insider ownership often is related to family control, stock-based compensation is less widespread and the market for corporate control is less developed.Starting from this presumption our data allows to make an unbiased observation as to whether insider ownership affects firm performance. Using a pooled data set of 648 firm observations for the years 2003 and 1998 we find evidence for a positive and significant relationship between corporate performance -as measured by stock price performance, market-to-book ratio and return on assets -and insider ownership. This relationship seems to be rather robust, even if we account for endogeneity by applying a 2SLS regression approach. Moreover, we also find outside block ownership as well as more concentrated insider ownership to have a positive impact on corporate performance. Overall the results indicate that ownership structure might be an important variable explaining the long term value creation in the corporate sector. JEL classification:G32

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Section: A Brief Review Of the Literaturementioning

confidence: 54%

“…30 It should be noted that we also included higher terms of MB SB FBM as done by Davies, Hillier, and McColgan (2005) without obtaining more promising results than those found in our base case model 2.…”

Section: Insert Table 11mentioning

confidence: 85%

Insider ownership and corporate performance: evidence from Germany

Kaserer

Moldenhauer

2007

RMS

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“…This explains the results of Jain and Kini (1995) who found a positive and significant relationship between the percentage of capital retained by the original entrepreneurs and post-IPO operating performance. However, this argument is not shared by all authors as there are those who argue that the entrenchment theory is one of the causes of firm's underperformance (Morck et al, 1988;Davies et al, 2005). Indeed, Demsetz (1983) and Fama and Jensen (1983) stipulate that a high insider ownership may be associated with adverse entrenchment effects that can lead to an increase in managerial opportunism at the expense of outside investors.…”

Section: Control Variables: Other Factors Influencing the Longterm Pementioning

confidence: 99%

Earnings management and performance of French IPO companies

Djerbi¹,

Jarboui²

2013

J. Account. Taxation

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In this paper, we examine the impact of discretionary current accruals on the performance of French IPO companies. We first note income-increasing earnings management in the first year as a public company and not in the year before the IPO (Initial Public Offerings). Based on a sample of 139 French IPOs over the period 1999 to 2007, including 38 failures, we also document that companies associated with aggressive earnings management in the IPO process, tend to suffer from subsequently poor returns and to delist for performance failure after IPO. However, we find no evidence to suggest that the level of initial return is negatively related to discretionary current accruals.

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“…La revue de la littérature théorique et empirique nous a permis de constater que la prise de risque managériale est intimement liée à la politique d'investissement (Davies et al, 2005;Coles et al, 2006;Kose et al, 2008), la politique de financement (Jensen et Meckling, 1976;Fama, 1980;Berger et al,1997) et le risque global de l'entreprise (Braido, 2006;Coles et al, 2006;Chakraborty et al, 2007). Nous considérons ces trois dimensions.…”

Section: Mesure De La Prise De Risque Managérialeunclassified

“…• l'étude des travaux portant sur la prise de risque managériale qui ont mis en exergue les différents détermi-nants de la prise de risque dans un contexte managérial (Coles et al, 2006, Kose et al, 2008, Davies et al, 2005.…”

Section: Introductionunclassified

Biais Cognitifs et Prise de Risque Managériale : Validation Empirique dans le Contexte Tunisien

Belanes¹,

Hachana

2010

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RésuméLe contexte de prise de décision est entaché par des biais cognitifs. Se basant sur un échantillon de 46 entreprises tunisiennes cotées durant 1997-2006, nous avons d’abord observé l’influence de trois biais (sur-confiance, mimétisme et illusion de contrôle) sur la perception du risque et ensuite, nous avons analysé la relation entre cette perception et la prise de risque effective. Nos résultats concluent à l’existence d’une relation positive entre le biais de sur-confiance et de mimétisme et la prise de risque et à une relation négative entre le biais de l’illusion de contrôle et la prise de risque managériale.

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Ownership structure, managerial behavior and corporate value

Cited by 181 publications

References 30 publications

Insider ownership and corporate performance: evidence from Germany

Insider ownership and corporate performance: evidence from Germany

Earnings management and performance of French IPO companies

Biais Cognitifs et Prise de Risque Managériale : Validation Empirique dans le Contexte Tunisien

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