Private contracting and corporate governance: Evidence from the provision of tag-along rights in Brazil

Bennedsen, Morten; Nielsen, Kasper Meisner; Nielsen, Thomas Vester

doi:10.1016/j.jcorpfin.2011.03.007

Cited by 11 publications

(5 citation statements)

References 30 publications

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Section: Tests Of Media Impact On Unificationssupporting

confidence: 92%

“…Our findings are related and perhaps complement recent studies such as Bennedsen, Nielsen, and Nielsen () and Liu and McConnell (). Bennedsen et al () study voluntary provisions of tag‐along rights (rights that secure an equal takeover price to public investors) in Brazilian firms. They suggest and support the hypothesis that controlling shareholders voluntarily grant this beneficial protection to public shareholders in order to mitigate the share price discounts caused by poor corporate governance.…”

Section: Tests Of Media Impact On Unificationssupporting

confidence: 92%

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The Media and Firm Reputation Roles in Corporate Governance Improvements: Lessons from European Dual Class Share Unifications

Lauterbach¹,

Pajuste²

2016

Corporate Governance

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Manuscript Type: EmpiricalResearch Questions/Issues: Do media pressure and firm reputational concerns propel corporate governance improvements? Specifically, can they encourage unifications of dual class shares into a single "one share one vote" class? Research Findings/Insights: Media criticism increases the likelihood of voluntary dual class share unifications. Firms more sensitive to public image are more likely to unify their dual class shares. Theoretical/Academic Implications: Media plays an important role in corporate governance promotion. Firm reputation is a valuable asset, sensitive to public opinion and media criticism. Some real firm decisions can be influenced by firm image and reputation considerations. Practitioner/Policy Implications: Firm image, reputation, and public relations activity are valuable. Media is a powerful and flexible tool that in some cases can substitute regulation in effectively restraining firms and their controlling shareholders.

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Section: Tests Of Media Impact On Unificationssupporting

confidence: 92%

Section: Tests Of Media Impact On Unificationssupporting

confidence: 92%

The Media and Firm Reputation Roles in Corporate Governance Improvements: Lessons from European Dual Class Share Unifications

Lauterbach¹,

Pajuste²

2016

Corporate Governance

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“…Other examples of market-induced changes include voluntary adoptions of higher governance quality by Brazilian firms joining Bovespa's New Market (Da Silveira et al, 2007) and the use of tag-along rights by Brazilian firms' controlling owners to increase shareholder protection for non-controlling owners (Bennedsen et al, 2007). While these changes may have added value, other legal and regulatory changes occurred around the same time and could have confounded the estimates.…”

Section: Firm Performance and Legal Protectionmentioning

confidence: 99%

Corporate governance, accounting and finance: A review

Brown¹,

Beekes²,

Verhoeven³

2010

Accounting &Amp; Finance

488

410

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We review accounting and finance research on corporate governance (CG). In the course of our review, we focus on a particularly vexing issue, namely endogeneity in the relationships between CG and other matters of concern to accounting and finance scholars, and suggest ways to deal with it. Given the advent of large commercial CG databases, we also stress the importance of how CG is measured and in particular, the construction of CG indices, which should be sensitive to local institutional arrangements, and the need to capture both internal and external aspects of governance. The 'stickiness' of CG characteristics provides an additional challenge to CG scholars. Better theory is required, for example, to explain whether various CG practices substitute for each other or are complements. While a multidisciplinary approach to developing better theory is never without its difficulties, it could enrich the current body of knowledge in CG. Despite the vastness of the existing CG literature, these issues do suggest a number of avenues for future research.

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“…Local regulators need to look for legal reforms to accommodate international corporate governance practices (Aguilera and Crespi-Cladera, 2016). For example, they may need to use innovative techniques to protect minority shareholders and offset corporate governance differences across countries, such as dual-class premiums, mandatory bid rules and provision of tag-along rights (Bennedsen et al , 2012). Corporate management should also use appropriate corporate governance mechanisms to solve agency problems, as this will increase investors’ confidence in corporate performance and facilitate access to foreign investment.…”

Section: Conclusion and Recommendationsmentioning

confidence: 99%

Corporate governance risk and the agency problem

ElKelish

2017

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Purpose This study aims to investigate the relationship between corporate governance risk and agency costs across different countries. Design/methodology/approach Corporate governance risk indicators were obtained from the Institutional Shareholder Services Europe (S.A.) for 4,135 firms across 27 countries. Agency costs and other control variables were derived from companies’ annual financial reports using the DataStream database. Ordinary least squares multiple regression analysis model was used to test the study hypothesis. Findings Agency costs have a significant negative impact on corporate governance risk across countries. The extent of corporate governance mechanisms used, however, varies across geographic regions and industry types. The relationship between corporate governance risk and agency costs is more obvious in the non-financial than financial sector. These results were robust after several statistical checks. Practical implications The findings will help stakeholders, including corporate management, regulators and investors to improve corporate governance mechanisms and capital allocation decisions across countries. Originality/value Evidence is provided on the role of agency costs in corporate governance risk across geographic regions for financial and non-financial companies. The paper also overcomes common problems in corporate governance research such as construct validity, limited data and endogeneity.

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Private contracting and corporate governance: Evidence from the provision of tag-along rights in Brazil

Cited by 11 publications

References 30 publications

The Media and Firm Reputation Roles in Corporate Governance Improvements: Lessons from European Dual Class Share Unifications

The Media and Firm Reputation Roles in Corporate Governance Improvements: Lessons from European Dual Class Share Unifications

Corporate governance, accounting and finance: A review

Corporate governance risk and the agency problem

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