Journal ArticleDOI
Firm Performance and Mechanisms to Control Agency Problems between Managers and Shareholders
Anup Agrawal,Charles R. Knoeber +1 more
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The authors examined the use of seven mechanisms to control agency problems between managers and shareholders, including shareholdings of insiders, institutions, and large blockholders, use of outside directors, debt policy, managerial labor market, and market for corporate control.Abstract:
This paper examines the use of seven mechanisms to control agency problems between managers and shareholders. These mechanisms are: shareholdings of insiders, institutions, and large blockholders; use of outside directors; debt policy; the managerial labor market; and the market for corporate control. We present direct empirical evidence of interdependence among these mechanisms in a large sample of firms. This finding suggests that crosssectional OLS regressions of firm performance on single mechanisms may be misleading. Indeed, we find relationships between firm performance and four of the mechanisms when each is included in a separate OLS regression. These are insider shareholdings, outside directors, debt, and corporate control activity. Importantly, the effect of insider shareholdings disappears when all of the mechanisms are included in a single OLS regression, and the effects of debt and corporate control activity also disappear when estimations are made in a simultaneous systems framework. Together, these findings are consistent with optimal use of each control mechanism except outside directors.read more
Citations
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Journal ArticleDOI
Corporate monitoring by shareholder coalitions in the UK
R. Crespi,Luc Renneboog +1 more
TL;DR: In this paper, the authors investigate whether voting coalitions are formed by shareholders in order to discipline incumbent management, and find evidence of successful executive director resistance to board restructuring if these executive directors can combine their ownership stakes to a substantial block of voting power.
Journal ArticleDOI
Corporate tax aggressiveness, outside directors, and debt policy: An empirical analysis
TL;DR: In this article, the influence of corporate tax aggressiveness on corporate debt policy and influence of outside directors on both debt and the debt-substitution effect was examined, based on a sample of 6967 firm-year observations over the 2001-2010 period.
Journal ArticleDOI
Corporate governance and firm value: a comparative analysis of state and non-state owned companies in the context of Pakistan
TL;DR: In this article, the influence of corporate governance on firm value varies across firms having different nature of ownership, i.e. state-and non-state-owned enterprises, and the results show that board independence has a significant and positive relationship with firm value only for state-owned companies.
Journal ArticleDOI
The Shareholder–Manager Relationship and Its Impact on the Likelihood of Firm Bribery
TL;DR: In this article, the authors examined the impact of the principal-owner's gender on firm bribery and found that bribery is more likely to occur when the principal owner is male rather than female.
Journal ArticleDOI
Corporate social responsibility reporting and corporate governance mechanisms: An international outlook from emerging countries
TL;DR: This is the pre-peer reviewed version of the following article: Corporate social responsibility reporting and corporate governance mechanisms: An international outlook from emerging countries, which has been published in final form.
References
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Journal ArticleDOI
Management Ownership and Market Valuation: An Empirical Analysis
TL;DR: This article investigated the relationship between management ownership and market valuation of the firm, as measured by Tobin's Q. In a 1980 cross-section of 371 Fortune 500 firms, they found evidence of a significant nonmonotonic relationship.
Journal ArticleDOI
The Structure of Corporate Ownership: Causes and Consequences
Harold Demsetz,Kenneth Lehn +1 more
TL;DR: In this paper, the authors argue that the structure of corporate ownership varies systematically in ways that are consistent with value maximization, and they find no significant relationship between ownership concentration and accounting profit rates for a set of firms.
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The Determinants of Capital Structure Choice
TL;DR: In this paper, the explanatory power of some of the recent theories of optimal capital structure is analyzed empirically and a factor-analytic technique is used to mitigate the measurement problems encountered when working with proxy variables.
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Additional evidence on equity ownership and corporate value
John J. McConnell,Henri Servaes +1 more
TL;DR: The authors investigated the relation between Tobin's Q and the structure of equity ownership for a sample of 1,173 firms for 1976 and 1,093 firms for 1986 and found a significant curvilinear relation between Q and common stock owned by corporate insiders.
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On the existence of an optimal capital structure: theory and evidence
TL;DR: In this article, the authors show that if there are significant "leverage-related" costs, such as bankruptcy costs, agency costs of debt, and loss of non-debt tax shields, then the marginal bondholder's tax rate will be less than the corporate rate and there will be a positive net tax advantage to corporate debt financing.