Showing papers by "IE University published in 1999"

Corporate Governance and Financial Performance: A Study of German and Uk Initial Public Offerings

Abstract: This important book presents a new original study of the German and UK financial markets. It addresses the relationship between corporate governance, ownership and financial performance in German and UK firms floated during the 1980s. Marc Goergen uses detailed company micro-data to examine the ownership and performance of each firm from the time of its flotation to six years later. He finds that the evolution of ownership depends on certain corporate characteristics and that differences in financial performance cannot be explained simply by differences in the concentration of ownership. The book sheds new light on the important issue of whether corporate ownership influences or is influenced by financial performance. The main findings of the book have important implications for public policy and the current public debate on corporate governance and the globalisation of financial markets. They are important for established financial markets and the transitional economies of Eastern and Central Europe as well as for international scholars interested in issues of corporate governance and the performance of firms. Contents: Preface 1. Introduction 2. Theory and Empirical Research 3. The German and UK Capital Markets 4. The Evolution of Ownership and Control in German IPO’s 5. British and German IPO’s – A Comparison 6. Explaining the Evolution of Ownership 7. Do German Firms have a Better Performance? 8. Conclusion and Policy Implications Bibliography Index

A Critique of the Empirical Methods of Integrative Social Contracts Theory

Abstract: Integrative social contracts theory (ISCT) uses empirical methods to develop guidelines for international business ethics. This article criticizes ISCT in terms of the way people actually think about contracts and agreements around the globe. Differences in orientations to communications context, moral reasoning, and institutional and structural conditions make the identification of authentic norms, hypernorms, and relevant communities problematic. The difficulties of the empirical methods suggest recourse to more traditional theoretical approaches for the identification of hypernorms as well as a stronger test for the compatibility of authentic norms with hypernorms.

Prediction of Ownership and Control Concentration in German and UK Initial Public Offerings

Abstract: The paper investigates why the corporate landscapes of Germany and UK are so different in terms of control by analyzing ownership and control evolution in recent IPOs. We report the control evolution of a sample of size- and industry-matched German and UK companies six years subsequent to the flotation. The initial shareholders in the average German IPO lose majority control six years after going public, whereas the initial owners of UK IPOs decrease their holding to less than the majority two years after going public. Acquisitions are frequent in the UK with 35% of IPOs being taken over versus only one German sample company. Partial take-overs are common in German firms: in one third of the sample a large controlling shareholder acquires control from the existing controlling shareholder. In order to predict the state of ownership and control six years after going public, a multinomial logit model is used. We distinguish four possible states of control: the company is (i) still controlled by the shareholders who controlled the company prior to the flotation, (ii) acquired by a closely held shareholder (i.e. an individual or family), (iii) acquired by a shareholder with diffuse ownership and (iv) widely held. We find that if the founder still owns a stake at the flotation, the probability that the company will be controlled by this founder after six years is large. For risky and poorly performing German and UK companies, the odds of ending up with concentrated ultimate control increase. In the case of German IPOs, the chance of substantial control concentration augments when non-voting shares have been issued at flotation and when the company experiences a high growth rate subsequent to the IPO. Profitable, low-risk, and large companies tend to be widely held six years after being listed.

Consistent versus Non-Consistent Term Structure Models: Some Evidence from the Spanish Market

Abstract: This article prices cap and swaptions in the Spanish market using the Vasicek, Cox, Ingersoll, and Ros and Hull and White (HW) models. Derivatives prices obtained with the Vasicek and CIR models estimated from time series data are very similar, but they differ substantially from the values given by the HW model fited to the term structureof interest rate swap yields (especially for at-the-money and out-of-the-money options). When the former models are estimated cross-sectionally, they produce option proces similar to those of the HW model. In samples of caps and swaptions, the Vasicek model estimated cross-sectionally, they produce option prices similar to those of the HW model. In samples of caps and swaptions, the Vasicek model estimated cross-sectionally outperforms the HW model. The Vasicek and CIR models estimated from time series produce very large pricing errors.

Cultura y gestion industrial: un análisis empírico

Abstract: Las “practicas excelentes” (i.e. best practices) de gestion industrial, utilizadas por las empresas lideres en sus sectores, son afectadas por los entomos de los paises en los que estas empresas operan. Una cuestion critica es, por tanto, la “transferibilidad” y/o “neutralidad” hacia los entomos nacionales de las practicas excelentes, particularmente las de tipo “blando” (i.e. de alto sesgo socio-organizacional). El foco de este analisis es la determinacion del impacto que las dimensiones socioculturales tienen sobre la viabilidad de implantacion de las “practicas excelentes”, a partir de los parametros de Hofstede. El analisis se basa en el International Manufacturing Strategy Survey(IMSS - Encuesta lnternacional de Estrategias de Manufactura). En general, es posible concluir que algunas de las llamadas “practicas excelentes” de gestion industrial son culturalmente “neutras”, aunque la gran mayoria de ellas son culturalmente “sensibles”.