Private Benefits - Ownership vs. Control

Hwang, Joon Ho

doi:10.2139/ssrn.549983

Cited by 7 publications

(5 citation statements)

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“…Private bene…ts as a fraction of equity value increase with asset intangibility (elasticity of :29) providing evidence in support of the hypothesis in Himmelberg et al (1999). Dyck and Zingales (2004) and Hwang (2005) also …nd that the block premium increases with the level of intangible assets.…”

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confidence: 59%

“…We …nd that private bene…ts of block holders as a fraction of equity value decrease with the target's size suggesting that the costs of higher monitoring outweigh the pecuniary and non-pecuniary bene…ts of running larger corporations. This is a novel e¤ect as neither Barclay and Holderness (1989) nor Hwang (2005) …nd a signi…cant relationship between …rm size and the block premium. Zingales (1995) and Nenova (2003) also fail to …nd a signi…cant e¤ect of size on the voting premium.…”

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confidence: 90%

“…In Barclay and Holderness (1989) neither leverage nor cash a¤ects the block premium. Also, Hwang (2005) …nds no robust e¤ect of leverage on the block premium. In a study of the voting premium in Brazil, Carvalhal da Silva and Subrahmanyam (2007) …nd that the voting premium increases with …rm leverage.…”

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confidence: 91%

“…This supports our prediction that it is harder to extract private bene…ts from …rms with poor performance who might be in …nancial distress and under signi…cant monitoring. Barclay and Holderness (1989) …nd that past performance leads to higher block premium, but Hwang (2005) …nds no e¤ect of stock returns on the block premium. Using measures of accounting performance, Carvalhal da Silva and Subrahmanyam (2007) …nd a positive impact on the voting premium whereas Guadalupe and Pérez-González (2005) …nd a negative impact.…”

Section: <Insert Figure 5 About Here>mentioning

confidence: 98%

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The Determinants of the Block Premium and of Private Benefits of Control

Albuquerque

Schroth

2008

SSRN Journal

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We study the determinants of private bene…ts of control in negotiated block transactions. We estimate the block pricing model in Burkart, Gromb, and Panunzi (2000) (BGP) acknowledging the presence of both block premia and block discounts in our sample. We …nd evidence in favor of the BGP model according to which the occurrence of block premia and block discounts depends on how competitive the block seller can be in opposing a potential tender o¤er for the target's stock. Private bene…ts represent 3% of the target …rm's stock market value. In addition, our approach allows us to measure the e¢ ciency with which private bene…ts are extracted: On average, each $1 of private bene…ts costs shareholders $2 of equity value. Private bene…ts decrease with target's size and short term debt, and increase with target's past performance, intangible assets, and cash. The later e¤ect is stronger if the target's cash is higher than the acquirer's cash. Acquirer's overpay an average of 7% of the target's stock price relative to the BGP benchmark. We use our structural estimation to conduct a counterfactual policy evaluation of the Mandatory Bid Rule. Our results suggest that the Mandatory Bid Rule fails to add value to shareholders because it fails to prevent welfare decreasing transactions and deters welfare increasing transactions by forcing ine¢ cient tender o¤ers.

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Section: <Insert Figure 5 About Here>mentioning

confidence: 59%

Section: <Insert Figure 5 About Here>mentioning

confidence: 90%

Section: <Insert Figure 5 About Here>mentioning

confidence: 91%

Section: <Insert Figure 5 About Here>mentioning

confidence: 98%

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The Determinants of the Block Premium and of Private Benefits of Control

Albuquerque

Schroth

2008

SSRN Journal

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“…‫ي‬ ‫ا‬ ) P % ‫ا‬ ( ‫در1‬ @ 4Dj# ‫ا‬ j % ‫و‬ X j'% ‫ا‬ Lj % ‫ا‬ j Z $% ‫ا‬ 0 ‫رب‬ ‫ا‬ 7 \<@ 7 j j\<@ 7 j j< PE Kj j%5E Kj j 7 Lj j ‫وذ‬ ‫ة‬ j j ) W j j 7 X j j'% ‫ا‬ Lj j % ‫ا‬ 5 j j# Wj jR ‫ا‬ ‫ا‬Bj j‫ھ‬ j j ‫و‬ ، j j ‫ا‬ ) Fan and Wong, 2002 ( 0j W j % ‫ا‬ Lj E KG% E ، : ‫دة‬ j ‫ز‬ ،-jE‫وا‬ ‫ا‬ ‫دة‬ j : X j'% ‫ا‬ Lj % ‫ا‬ ‫م‬ j ‫ا‬ ‫ا_دارة‬ h .7 ‫‰ت‬ P7 Kj ‫أن‬ jP% ،kE X j' Wj\@E ‫ى‬ j+‫أ‬ ‫ت‬ ) jS j ‫إ‬ ‫ل‬ jN ‫ا‬ Kj / ،k ‫ص‬ @ 0 j\<E ;j j' j jR‫إ‬ 4Dj j#‫أ‬ j ‫ل‬ j j$5 ‫ا‬ ، j j ‫ا‬ Z j j$7 j7 (Hwang, 2004) . ‫م‬ j j 0j jP ‫و‬…”

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أثر التباین بین حقوق التدفق النقدی وحقوق الرقابة على إدارة الأرباح دراسة اختباریة على الشرکات المساهمة المصریة

یوسف¹,

بلال²,

المنعم³

2020

مجلة البحوث التجاریة

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It is this study to study the effect of the difference between the cash flow rights and the rights of control over profit management in Egyptian companies. Control rights over cash flow rights as more immunization, describe otherwise) and profit management (using the Jones 1991 model), at 3 levels of ownership 5% or more, 10%, 20%. The research tests the study hypothesis for a sample of 142 joint stock companies listed on the Egyptian Stock Exchange during 2013 to 2015. Using the regression model, the results indicate a positive relationship between the difference between cash flow rights and control rights and the management of profits that are at the ownership level of 5% or more, 10% This may be due to the increase in the difference between cash flow rights and control rights resulting from the existence of hierarchical and overlapping ownership structures, increases the conflict of interests between the controlling and non-controlling shareholders (horizontal agency problems the second type of agency problems), changes in conflict of interest from one of the reasons Key to profit management practices. The results also indicate that there is no relationship with the discrepancy between cash flow rights and control rights and profit management, at the ownership level of 20%, and may be due to the lack of adequate disclosure of data on ownership and control structures in the Egyptian environment.

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The Determinants of Ownership Structure: Evidence from Brazilian Agricultural Cooperatives

2013

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The separation of ownership and control observed in large corporations is common to other organizations such as large professional partnerships, financial mutuals, nonprofits, and cooperatives. This separation gives rise to control and influence cost problems in cooperatives. However, it is not observed in all Brazilian agricultural cooperatives, where certain members have both residual claim and formal control rights. In this article, we examine the allocation of decision management and control rights and the determinants of ownership structure in a sample of Brazilian agricultural cooperatives. Using survey data, we employ multivariate regression techniques to empirically investigate the factors determining the allocation of ownership rights and the separation of ownership and control. Our findings do not lend strong support to agency theory, but they help inform research seeking to shed light on the determinants of decision rights allocation in agricultural cooperatives.

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Private Benefits - Ownership vs. Control

Cited by 7 publications

References 0 publications

The Determinants of the Block Premium and of Private Benefits of Control

The Determinants of the Block Premium and of Private Benefits of Control

أثر التباین بین حقوق التدفق النقدی وحقوق الرقابة على إدارة الأرباح دراسة اختباریة على الشرکات المساهمة المصریة

The Determinants of Ownership Structure: Evidence from Brazilian Agricultural Cooperatives

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