This paper surveys research on corporate governance, with special attention to the importance of legal protection of investors and of ownership concentration in corporate governance systems around the world.

A Survey of Corporate Governance

This article surveys research on corporate governance, with special attention to the importance of legal protection of investors and of ownership concentration in corporate governance systems around the world. CORPORATE GOVERNANCE DEALS WITH the ways in which suppliers of finance to corporations assure themselves of getting a return on their investment. How do the suppliers of finance get managers to return some of the profits to them? How do they make sure that managers do not steal the capital they supply or invest it in bad projects? How do suppliers of finance control managers? At first glance, it is not entirely obvious why the suppliers of capital get anything back. After all, they part with their money, and have little to contribute to the enterprise afterward. The professional managers or entrepreneurs who run the firms might as well abscond with the money. Although they sometimes do, usually they do not. Most advanced market economies have solved the problem of corporate governance at least reasonably well, in that they have assured the flows of enormous amounts of capital to firms, and actual repatriation of profits to the providers of finance. But this does not imply that they have solved the corporate governance problem perfectly, or that the corporate governance mechanisms cannot be improved. In fact, the subject of corporate governance is of enormous practical impor

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We present data on ownership structures of large corporations in 27 wealthy economies, making an effort to identify ultimate controlling shareholders of these firms. We find that except in economies with very good shareholder protection, relatively few of these firms are widely-held, in contrast to the Berle and Means image of ownership of the modern corporation. Rather, these firms are typically controlled by families or the State. Equity control by financial institutions or other widely-held corporations is less common. The controlling shareholders typically have the power over firms significantly in excess of their cash flow rights, primarily through the use of pyramids and participation in management. The results suggest that the principal agency problem in large corporations around the world is that of restricting expropriation of minority shareholders by the controlling shareholders, rather than that of restricting empire building by professional managers unaccountable to shareholders.

Corporate Ownership Around the World

This paper surveys capital structure theories based on agency costs, asymmetric information, product/input market interactions, and corporate control considerations (but excluding tax-based theories). For each type of model, a brief overview of the papers surveyed and their relation to each other is provided. The central papers are described in some detail, and their results are summarized and followed by a discussion of related extensions. Each section concludes with a summary of the main implications of the models surveyed in the section. Finally, these results are collected and compared to the available evidence. Suggestions for future research are provided.

https://onlinelibrary.wiley.com/doi/pdf/10.1111/j.1540-6261.1991.tb03753.x

The Theory of Capital Structure

I offer an institutional theory of corporate social responsibility consisting of a series of propositions specifying the conditions under which corporations are likely to behave in socially responsible ways. I argue that the relationship between basic economic conditions and corporate behavior is mediated by several institutional conditions: public and private regulation, the presence of nongovernmental and other independent organizations that monitor corporate behavior, institutionalized norms regarding appropriate corporate behavior, associative behavior among corporations themselves, and organized dialogues among corporations and their stakeholders. Concerns about corporate social responsibility have grown significantly during the last two decades. Not only has the issue become commonplace in the business press and among business and political leaders (Buhr & Graf

http://laisumedu.org/DESIN_Ibarra/desin/imagenescampbell/tres-c.pdf

Why would corporations behave in socially responsible ways? an institutional theory of corporate social responsibility

We investigate the source of stockholder gains in going private transactions. We find support for the hypothesis advanced by Jensen that a major source of these gains is the mitigation of agency problems associated with free cash flow. Using a sample of 263 going private transactions from 1980 through 1987, our results indicate a significant relationship between undistributed cash flow and a firm's decision to go private. In addition, we find that premiums paid to stockholders are significantly related to undistributed cash flow. These results are especially strong for firms that went private between 1984 and 1987 and also for firms whose managers owned relatively little equity before the going private transaction.

Free Cash Flow and Stockholder Gains in Going Private Transactions

We argue that management sells assets when doing so provides the cheapest funds to pursue its objectives rather than for operating efficiency reasons alone This hypothesis suggests that (1) firms selling assets have high leverage and/or poor performance, (2) a successful asset sale is good news and (3) the stock market discounts asset sale proceeds retained by the selling firm In support of this hypothesis, we find that the typical firm in our sample performs poorly before the sale and that the average stock-price reaction to asset sales is positive only when the proceeds are paid out

Asset Sales, Firm Performance, and the Agency Costs of Managerial Discretion

M Extensive empirical evidence supports the view that takeovers are beneficial to the shareholders of target firms.I Virtually every study has found that these shareholders receive large premiums, averaging about 30%, for their shares. The wealth effects on shareholders of acquiring firms, however, are much more puzzling. Researchers measuring these wealth effects have found them to average close to zero and to be negative for some categories of offers. The same logic that argues that large premiums paid in takeovers are evidence that takeovers benefit shareholders of target firms, also leads some to argue that the absence of stock price increases (and the existence of stock price declines in some cases) for bidding firms reflects neutral (or bad) investments by management of bidding firms. In this study, shareholder wealth effects in tender offers are examined and, more specificly, characteristics of tender offer bids that may determine the returns earned by the shareholders of acquiring firms are explored. For more than 450 tender offers from 1963-1986, We thank Paula Moolhuyzen, Ken Lehn, Jeffry Netter, and the referees of this journal for many helpful comments and suggestions. The SEC, as a matter of policy, disclaims responsibility for any private publication or statement by any of its employees. The views expressed herein are those of the authors and do not necessarily reflect the views of the Commission of of the authors' colleagues on the staff of the Commission.

The Returns to Acquiring Firms in Tender Offers: Evidence from Three Decades

Shark repellents and stock prices

https://www.nber.org/system/files/working_papers/w4654/w4654.pdf

Annette B. Poulsen

Papers

Free Cash Flow and Stockholder Gains in Going Private Transactions

Asset Sales, Firm Performance, and the Agency Costs of Managerial Discretion

The Returns to Acquiring Firms in Tender Offers: Evidence from Three Decades

Shark repellents and stock prices

Asset sales, firm performance, and the agency costs of managerial discretion