https://www.research.manchester.ac.uk/portal/files/45984177/CEO_gender_02222016.pdf

CEO gender, corporate risk-taking, and the efficiency of capital allocation

We extend the literature on how managerial traits relate to corporate choices by documenting that firms run by female CEOs have lower leverage, less volatile earnings, and a higher chance of survival than otherwise similar firms run by male CEOs. Additionally, transitions from male to female CEOs (or vice-versa) are associated with economically and statistically significant reductions (increases) in corporate risk-taking. The results are robust to controlling for the endogenous matching between firms and CEOs using a variety of econometric techniques. We further document that this risk-avoidance behavior appears to lead to distortions in the capital allocation process. These results potentially have important macroeconomic implications for long-term economic growth.

/pdf/ceo-gender-corporate-risk-taking-and-the-efficiency-of-4pyxh0mmyi.pdf

CEO Gender, Corporate Risk-Taking, and the Efficiency of Capital Allocation

The Modern Corporation and Private Property

https://www.bde.es/f/webbde/GAP/Secciones/SalaPrensa/Agenda/Eventos/12/Ago/08.schaeck-berger-kick-dayahead.pdf

Executive board composition and bank risk taking

Sharp increases in the price of oil are generally seen as a major contributor to business cycle asymmetries. Moreover, the very recent highs registered in the world oil market are causing concern about possible slowdowns in the economic performance of the most developed countries. While several authors have considered the direct channels of transmission of energy price increases, other authors have argued that the economic downturns arose from the monetary policy response to the inflation presumably caused by oil price increases. In this paper a structural cointegrated VAR model has been considered for the G-7 countries in order to study the direct effects of oil price shocks on output and prices and the reaction of monetary variables to external shocks. Empirical analysis shows that, for most of the countries considered, there seems to be an impact of unexpected oil price shocks on interest rates, suggesting a contractionary monetary policy response directed to fight inflation. In turn, increases in interest rates are transmitted to real economy by reducing output growth and the inflation rate.

/pdf/oil-prices-inflation-and-interest-rates-in-a-structural-3096w1i2ky.pdf

Oil Prices, Inflation and Interest Rates in a Structural Cointegrated VAR Model for the G-7 Countries

We demonstrate theoretically and empirically that firms' capital investment depends on portfolio diversification of their controlling owners. The effect of owners' portfolio diversification on firms' investment levels depends crucially on firms financial constraints: the investment-diversification relation is positive for relatively unconstrained firms and is negative for relatively constrained ones. Owner fixed-effects, a quasi-natural experiment, and instrumental variable analysis suggest that this result is not driven by potential endogeneity of owners' diversification. A matched-sample analysis, selection model, and an alternative measure of financial constraints show that our findings are also not driven by the endogeneity of our proxy for financial constraints.

Owners' Portfolio Diversification and Firm Investment: Theory and Evidence from Private and Public Firms

We use a large database of more than 685,000 European firms to show that financial flexibility attained through conservative leverage policies is more important for private, small, medium-sized and young firms and for firms in countries with lower access to credit and weaker investor protection. Further, using the recent financial crisis as a natural experiment, we show that financial flexibility status allows companies to reduce the negative impact of liquidity shocks on their investment decisions. Our findings support the hypothesis that financial flexibility relates to companies JEL Classification: G31, G32, D92

Financial flexibility across the euro area and the UK

We use a novel database of more than 685,000 European firms to show that financial flexibility attained through conservative leverage policies is more important for private, small, medium-sized and young firms and for firms in countries with lower access to credit and weaker investor protection. Further, using the recent financial crisis as a natural experiment, we show that financial flexibility status allows companies to reduce the negative impact of liquidity shocks on their investment decisions. Our findings support the hypothesisthat financial flexibility relates to companies? ability to undertake future investment, despite market frictions hampering possible profitable growth opportunities.

/pdf/financial-flexibility-across-the-euro-area-and-the-uk-45bajfcwfk.pdf

Financial Flexibility across the Euro Area and the UK

In this paper we analyse the evolution of the direct and ultimate ownership structure of a large sample of UK non-financial listed firms over the last decade. Our data show that while outsider ownership is relatively stable over time, managerial ownership shows a sharp decreasing trend and it is significantly lower in the presence of a large outside controller. Nonetheless, while average shareholding by executives confirms the decreasing trend, the opposite holds for non-executive directors. In addition, while average board size is rather constant in time, the proportion of non-executives is steadily increasing in time. As far as ultimate ownership is concerned, our data show that the existence of complex ownership structures in the UK is far from being negligible. We document that more than 10 per cent of the firms are owned via a complex structure and the degree of divergence between cash flow and control rights for these firms is around 11 per cent at the 10 per cent cut-off. Our data also suggest that the presence of complex structures is decreasing in time at any cut-off level. In addition, we report a decreasing trend over time of "widely held" firms. Finally, we show preliminary evidence of a negative impact of the divergence between cash flow and control rights on firm value.

Direct and Ultimate Ownership Structures in the UK: an intertemporal perspective over the last decade

Using new data for the universe of firms covered in Amadeus, we reconstruct the portfolios of shareholders who hold equity stakes in private and publicly-traded European firms. We find great heterogeneity in the degree of portfolio diversification across large shareholders. Exploiting this heterogeneity, we document that firms controlled by diversified large shareholders undertake riskier investments than firms controlled by non-diversified large shareholders. The impact of large shareholder diversification on corporate risk-taking is both economically and statistically significant. Our results have important implications at the policy level because they identify one channel through which policy changes aimed at improving capital market development can improve economic welfare.

Roberto Mura

Papers

Owners' Portfolio Diversification and Firm Investment: Theory and Evidence from Private and Public Firms

Financial flexibility across the euro area and the UK

Financial Flexibility across the Euro Area and the UK

Direct and Ultimate Ownership Structures in the UK: an intertemporal perspective over the last decade

Large Shareholder Diversification And Corporate Risk- Taking