Firm Size and Ownership Structure: Effects on Motivations for Use of Business Community Involvement Practices

This study presents an empirical investigation of the effects of size and ownership structure of the firm on the motivations for use of business community involvement practices. The “motivation‐mix” conceptual framework composed by commitment, calculation, conformance and caring motivational mechanisms is used for the conduction of eight comparative case studies. Results indicate that (1) size and ownership structure, per se, do not affect the motivations, and (2) high levels of calculation and low levels of caring are observed in one particular combination of size‐ownership structure: large, publicly held firms.     

The impact of family CEO’s ownership and the moderating effect of the second largest owner in private family firms

This study explores two ownership issues in private family firms. First, we investigate the relationship between the ownership of family CEOs and firm performance, and postulate that this relationship in private family firms is more complex than the inverted “U” relationship found in public family firms. Second, we predict a potential moderating effect of the second largest owner, who may exert a monitoring role on family CEOs. We focus on private family firms as recent studies show that private family firms have distinct features compared to public family firms, and that findings documented in public family firms may not apply to the ubiquitous, but much less studied, private family firms. We have applied agency theory to develop the two hypotheses, used secondary data on a large sample of private family firms, utilized an adjusted conventional quadratic technique to test the hypotheses, and validated the findings using a second method of piecewise linear specification. The results show that the non-linear relationship between the ownership of family CEOs and firm performance is more complicated than the often-documented inverted “U” shape from public firms. Meanwhile, the second largest owner with a high enough ownership stake can impose a positive moderating effect by mitigating potential agency problems caused by family CEOs.     

股权结构与择时披露

本文从股权集中度视角出发,分别探讨了国有控股公司和民营控股公司股权集中度对上市公司择时披露行为的影响。结果表明,对于国有控股公司股权集中度与管理层选择周末披露的概率呈正U型关系;对于民营控股公司股权集中度与管理层选择周末披露盈余公告的概率呈倒U型关系。进一步,由于我国民营上市公司控制链较长,终极控制权与现金流权分离问题严重,我们又从终极控制权,以及终极控制权与现金流权分离度角度研究了民营上市公司择时披露的影响因素。与股权集中度影响类似,我们发现在民营上市公司中,终极控制权持股比例与管理层选择周末披露盈余公告的概率呈倒U型关系,终极控制权与现金流权分离度与管理层选择周末披露盈余公告的概率呈正向关系。     

Is there a distinctive MENA model of corporate governance?

This study explores the diversity of corporate governance practices in the MENA region, with particular emphasis on Saudi Arabia and Egypt. Interviews with senior managers find that the state, foreign investors and large family groups act as monitors of corporations in both countries, whereas the role of institutional investors and other shareholder activist groups is minimal. Ownership was more concentrated in Egypt than in Saudi Arabia, particularly in family firms. However, control is firmly in the hands of dominant shareholders even when ownership concentration is not high enough to merit such control and boards are dominated by majority shareholders. The high levels of concentrated ownership and control, and the low levels of disclosure and transparency, clearly differentiates the corporate governance system in the region from that in Anglo-American countries while the importance of state and family shareholders reflects characteristics of organisation and control found in many developing countries, predominantly those in Asia. However, it remains premature to speak of a unique MENA model of corporate governance.     

Ownership and corporate social responsibility: "The power of the female touch"

Using a sample of 26,029 firm-year observations over the period 2002–2017 from 4,479 firms and 44 countries, we examine the relationship between ownership concentration and corporate social responsibility by focusing on the mediating role of board gender diversity and the moderating role of family shareholding. We find that ownership concentration negatively affects corporate social responsibility, and the board gender diversity partially mediates this negative effect. Our results indicate that the mediating effect of board gender diversity leads to a 10.65 percent decrease in the impact of ownership concentration on corporate social responsibility. Furthermore, moderated path analysis indicates that family shareholding weakens the direct effect of ownership concentration on board gender diversity and its indirect effect on corporate social responsibility. In post hoc analysis, we also document that the effect of gender diversity on the board is more prevalent in high gender-egalitarian societies where women are more involved in decision-making. Our study addresses the strategic role of female board members in increasing firms’ respect for corporate social responsibility, especially in family-controlled firms. Thus, our results may provide insights to regulators and policymakers to enhance firms’ corporate social practices by encouraging women’s participation on corporate boards.     

上市公司治理:理论与现实的距离——基于1250份上市公司“自查报告和整改计划”的分析

本文根据1250家上市公司所公布的"自查报告和整改计划",重点从大股东、董事会/监事会、经理层以及投资者法律保护等四个方面对"自查报告和整改计划"的调查问题进行全面归纳、整理、分解和剖析,通过统计分析和理论文献对比,综合反映出目前我国上市公司治理现状和问题.调查分析结果表明,虽然我国目前已基本上建立了一整套与上市公司治理相关的法律法规,上市公司在大股东、董事会、经理层和投资者保护等方面的行为得到了一定的规范约束.但是,我国上市公司治理仍然处在不断完善过程中,如何强化大股东的信托义务和法律责任,从根本上解决大股东侵占中小股东利益的问题、保证董事会制度的独立性和有效性、培育经理人市场,积极推进股权激励机制、落实投资者法律保护制度等成为今后完善我国上市公司治理的重要任务.     

Innovation by Operating Practices in Project Alliances – When Size Matters

Project alliances offer firms an opportunity to increase innovation performance through the flexible combination of specialized competencies across firms. Inspired by internal project management I classify two metrics of project alliances: formal and emergent operating practices. This study of 166 project alliances analyses the innovation performance impact of those practices. I find that emergent operating practices improve planned and serendipitous innovation regardless of a firm's size. After a classification of two groups, small and large firms, I find that firm size moderates the effect of formal operating practices. Results show that small firms can improve their innovation performance by formal operating practices. Instead, large firms will face performance reductions on planned innovation when implementing formal operating practices.     

国有股和法人股对公司业绩的影响--公用事业型上市公司的实证研究

公司的股份集中于少数几个大股东手中是中国公司股权结构的一个普遍特征,研究这些大股东如何凭借其持股地位影响公司业绩是中国公司股权结构研究的一个非常重要的问题.本文选取了在上交所上市的公用事业型公司1998年至2002年的平行数据进行实证研究,结果表明,法人股对公司业绩有积极影响,国有股对公司业绩的影响视具体情况而定.     

Does family matter? Ownership,motives and firms’ environmental strategy

Extant research has primarily focused on the economic drivers and outcomes of corporate environmental performance. This trajectory oversimplifies the motives for environmental strategies across all firm types and particularly overlooks how firm ownership presents other motives for environmental strategies. In this study, we leverage institutional theory to examine how family motives, underpinned by family members' desire to gain or preserve family legitimacy and socio-emotional wealth, affect ISO 14001 certification. Using firm-level data, we find that family ownership has a positive effect on ISO 14001 certification. This effect is stronger for firms whose names include the family name and also for firms located closer to large cities. Our study contributes to nonmarket strategy literature by showing that family motives underpin firms’ environmental initiatives. It also contributes to institutional theory by delineating the levels of legitimacy that spur nonmarket strategy in family firms.     

Shareholder activism among portfolio managers: rational decisions or 15 minutes of fame?

This paper investigates shareholder activism by observing Swedish portfolio managers’ behavior at firms’ annual general meetings. Institutional shareholders’ voting behavior and tendencies for raising opinions at the general meetings are related to firm characteristics, suggested by both agency theory and institutional perspectives. The results show that institutional shareholders are more likely to be active in large firms, which appear a lot in media, and have a large proportion of institutional ownership. Portfolio managers appear not to consider bad firm performance as a reason for targeting firms. Instead, managers’ behavior is consistent with the institutional notion that they benefit from the activism themselves, without trying to improve target firms’ performance. In view of this notion, it is rational for managers to be active in large firms, with large media coverage, achieving their 15 minutes of fame at the general meetings.     

Related party transactions and audit fees: the role of the internal audit function

Related party transactions (RPTs) are viewed as genuine transactions that rationally fulfil other economic demands of a company. However, RPTs can also be used to transfer wealth from minority shareholders to controlling shareholders. The existence of such transactions may deteriorate financial reporting quality, increase audit risk, and as a result increase audit fees. This study examines the relationship between RPTs and audit fees in Malaysia, where ownership is often concentrated within a controlling family and corporate governance mechanisms are poor. It also investigates the moderating effect of the internal audit function (IAF) on this relationship. We find that external auditors base their fees on the types of RPTs undertaken. Specifically, our results show that audit fees are higher for firms that undertake RPTs involving the sale and purchase of assets, goods, and services. We also document that external auditors rely on the IAF, and thus their fees are lower for firms that undertake RPTs and that have made a large investment in an IAF. Our study is the first to provide evidence that RPTs in Malaysian firms may be abused as a channel to facilitate tunnelling and that the IAF plays a vital role in controlling such transactions.     

Effect of best management practices on the performance and productivity of small firms

Abstract

Recent research on productivity finds that best management practices are a crucial but neglected element in explaining firm productivity. This stream of research also focuses on why a large number of firms may not implement best management practices despite their apparent benefits. In this paper, we examine the adoption of best management practices in small leveraged buyout (LBO) firms. Our choice of small LBO is motivated by the fact that these firms undergo extensive restructuring and, therefore, there is an opportunity to study the adoption process of best management practices. The findings show that buyout companies introduce best management practices (operations, monitoring, targets and incentive-related practices) at different stages of their development, and more importantly, these practices evolve in response to changes in various firm-level characteristics. For example, companies emphasizing cost leadership tend to follow targets and monitoring related practices while firms following a differentiation strategy are more likely to implement incentives and operations related management practices. Buyout sponsors’ board representatives and new CEO also play a critical role in the adoption of these best management practices which are linked to superior firm performance, measured as growth in revenues, productivity and return on assets.     

Managerial Risk‐taking in International Acquisitions in the Brewery Industry: Institutional and Ownership Influences Compared

This paper deals with the role that institutional differences play in managerial risk‐taking when firms engage in international acquisitions. It is assumed that multinational corporations (MNCs) have different interests and capabilities when dealing with international acquisition, which in the authors’ view are significantly shaped by specific home country institutional influences. This study concerns the question of how different forms of ownership – concentrated (e.g. family and bank based) and dispersed (stock market based) – influence risk‐taking and managerial decision‐making in large international acquisitions. Comparing a total of 12 large acquisitions of four leading MNCs in the global brewery industry, the paper shows that mutually reinforcing influences of country of origin (coordinated vs liberal market economies) and ownership (family ownership vs stock market ownership) lead to different risk profiles and managerial risk‐taking with regard to international acquisitions.     

It’s all about culture! Institutional context and ownership concentration across Europe

It is widely recognised that the formal institutional context affects firm ownership concentration. However, the impact of the informal institutional context has received less research attention. Drawing from institutional theory, we tested our hypothesis that both the formal and informal (cultural) institutional contexts simultaneously influence firm ownership concentration. Based on a firm-level database of the largest 600 listed companies in 19 European countries for the period 2009–2015, we found that both formal and informal institutional contexts, considered independently from each other, affect the level of firm ownership concentration. However, when these institutional contexts are considered together, the significance of the formal institutional context's effect on ownership concentration disappears while the informal (cultural) institutional context remains significant. Specifically, our findings indicate that high power distance, collectivism, uncertainty avoidance, restraint, and short-term orientation favour firm ownership concentration. Overall, our findings demonstrate that the diversity in European cultures explains firms' different levels of ownership concentration across European firms, signalling that the European Union's efforts towards a common regulatory frame may not necessarily lead to a convergence of European firms' ownership structures and, consequently, of corporate governance practices.     

Voluntary disclosure and ownership structure: an analysis of dual class firms

This study focuses on the association of voluntary compensation disclosure and ownership structure. It provides evidence that the detachment of control and cash flow rights in dual class share firms is associated with lower levels of compensation disclosure. This association is incremental to the level of managerial ownership and family ownership. The study attributes these disclosure results to the concealment of excess compensation in dual class share firms. Consistent with this explanation, the study finds that managers in dual class share firms earn higher compensation relative to their single class counterparts. An analysis within dual class firms also reveals that compensation disclosure is decreasing in managers’ voting control but increasing in their cash flow rights consistent with a private control benefits explanation. To examine these research questions, the study develops a contextual measure of compensation disclosure that attempts to capture firms’ economic bases for award of compensation.     

Adjustments of wage-tenure profiles with respect to entry age

This paper adds a new empirical finding of the impact of workers’ entry age on wage-tenure profiles to the literature, which might be explained by human capital and deferred compensation models. I analyze two different data sets stemming from personnel records of a large German company and from German linked employer-employee data. The analyzed company employs a quite large share of older workers but does not hire many older workers. Estimated earnings functions indicate that wage-tenure profiles are adjusted with respect to entry age: workers with older entry age earn higher entry wages and have lower wage growths than younger workers. The linked employer-employee data confirm the findings from personnel records as most firms pay higher entry wages and flatter wage-tenure profiles to older new entrants. The personnel data set and the linked employer-employee data set have their advantages and disadvantages so that an analysis of both enhances the credibility of the main results.     

Country-specific institutional effects on ownership: concentration and performance of continental European firms

This paper examines the effect of country-specific institutional constructs on the relationship between ownership concentration and performance for firms in the eight Continental European countries of Austria, Belgium, Germany, Spain, France, Italy, the Netherlands and Portugal. Using data from publicly-traded firms owned by other companies (i.e., blocks), measures of the quality of investor and creditor protection and the effectiveness of legal institutions are applied. Employing a hierarchical moderated multiple regression analysis, differential validity is established for the relationship between ownership concentration and performance as measured by return on shareholders’ funds. This differential effect comes from creditor protection regimes and is consistent with a relational corporate governance model based on debt finance and concentrated ownership.     

利益关联、评级资格管制与基金评级公正性

具有基金评级资格的证券公司与证券投资基金之间存在着紧密而有趣的经济关系,一方面,具有基金评级资格的证券公司可以对基金进行评级,另一方面,基金与证券公司之间可能存在利益关联,具体体现在:1)基金要通过证券公司的交易席位进行交易并相应地给予证券公司交易佣金;2)证券公司可能是投资基金的大股东.那么这两种利益关联会损害证券公司作为基金评级机构的公正性吗？研究发现:1)如果证券公司与投资基金之间存在交易佣金关系或股权关系,那么证券公司会显著提高基金的评级等级;2)通过利益关联获得的基金评级对基金未来业绩解释力明显较低;3)2010年实施基金评价资格管制之后,上述两种现象更为明显.综合研究结果表明,利益关联会损害证券公司作为基金评级机构的公正性,且基金评级资格管制可能进一步加剧了利益关联对评级公正性的损害.     

机构投资者持股与上市公司违规行为的实证研究

本文采用部分可观测的Bivariate Probit估计方法,对2001年至2009年中国1729家上市公司进行回归检验,发现机构投资者持股比例降低了公司违规行为倾向,同时增加了公司违规行为被稽查的可能性。该结论在控制了机构投资者变量内生性的因素后仍旧稳健。进一步研究表明,相比公司经营违规,机构投资者对信息披露违规倾向的影响更强。另外,相比证券机构投资者,养老保险基金、社保基金、企业年金持股的公司中违规公司比例更低。除此以外,机构投资者对公司违规的抑制与检举作用并不受其它公司治理变量的影响。本文的研究表明中国机构投资者在预防与打击上市公司违规行为方面发挥了重要的作用,并且也为上市公司与监管部门提供了治理和防范企业违规的线索。     

Ownership concentration,contestability, family firms,and capital structure

This study analyses the distribution of power among the several blockholders of a firm and the identity of those blockholders as a determinant of firm leverage. Using a sample of 694 firms from 12 Western European countries, our results support a negative relationship between ownership concentration in the hands of the main blockholder and firm leverage. Moreover, we detect that the presence of a second and third large shareholder (beyond the first blockholder) has a significant positive effect on the leverage ratio. In addition, the results show that contestability in family firms plays a more relevant role. Finally, we show that family firms do have significant impact on firm leverage level, and this impact varies depending on the legal framework and institutional environment. In our main sample the results show family firms negatively affect market leverage, supporting the theory that family firms are more averse to an increase in the debt level due to the risk of bankruptcy and financial distress as a result of having an under-diversified portfolio. In contrast, the opposite effect is found in the sample that excludes the United Kingdom. This last result cannot be explained by agency theory, given that family businesses are those that suffer less from Type I agency problems. This result suggests either some difficulty in financing their investments by issuing new equity or the need to use debt as a signal of the quality of its investments. Our results prove to be stable against a battery of robustness tests.