 |
Unveiling The Role of Multiple Blockholders In Unlisted Firms: Evidence From Italy
|
Author: Annalisa Russino, U. of Palermo
Author: Pasquale Massimo Picone, U. of Bergamo
Author: Giovanni Battista Dagnino, U. of Catania
|
|
|
|
|
|
|
|
This paper detects the principal/principal conflicts arising among blockholders in unlisted firms to grasp the relationship between the presence of multiple blockholders and corporate performance. Using a panel data of 56,430 observations of Italian firms over 2009-2014, we test a set of hypotheses differentiating whether one of the blockholders is also the controlling shareholder and the case where firm control is obtained by forming a coalition or by winning a voting contest. When a single blockholder controls the firm, we find a U-shaped relationship between blockholders' ownership concentration and firm performance. In the absence of a controlling shareholder, the empirical evidence shows that blockholders' ownership concentration negatively affects firm performance
|
|
Search Terms: unlisted firm | principal/principal | ownership
|
|
Paper is No Longer Available Online: Please contact the author(s).
|
|
|
|
|
|
Exploring the Impact of Institutional Investor and Board Interlock Networks on Acquisition Premium
|
Author: Hansin Bilgili, Kansas State U.
Author: Holly Loncarich, U. of Arkansas
Author: Tsvetomira Bilgili, Kansas State U.
Author: Alan E Ellstrand, U. of Arkansas
|
|
|
|
|
|
|
|
Following resource dependence and network theoretical perspectives, we conceptualize central institutional investors as prominent network actors that can provide firms with information that can reduce uncertainty associated with acquisitions. We hypothesize and test the independent and interaction effects of centrality of firms’ institutional investors in the investor network and firms’ centrality in the interlocking directorate network on acquisition premiums. Using a sample of 266 acquisition transactions by 215 public firms, we found that both forms of inter- organizational networks influence premiums, but in opposite directions. Our results also suggest that centrality of governance constituencies in these networks have independent, rather than joint effects on acquisition premiums. We discuss the implications of our results for resource dependence theory and for research on inter-organizational networks.
|
|
Search Terms: resource dependence theory | network theory | acquisition premium
|
|
Paper is No Longer Available Online: Please contact the author(s).
|
|
|
|
|
|
Do Institutional Owners Lead Firms into Disaster? Institutional Owners and Exploration (WITHDRAWN)
|
Author: Sebastian Junge, U. of Erlangen-Nuremberg
|
|
|
|
|
|
|
|
The aptitude of an organization to explore new knowledge and simultaneously exploit existing capabilities is proposed to improve a firm’s performance and facilitate its long-term survival. However, little is known about organizational antecedents that foster or hinder a firm’s exploration‒exploitation behavior. I hypothesize and test different institutional owners as pivotal determinants of a firm’s exploration or exploitation alignment. Further, I propose CEO ownership as governance mechanism that is used to align a firm’s behavior with the interests of institutional owners. I test my hypotheses in a longitudinal study of S&P 500 firms between 2005 and 2014. The results show that long-term oriented institutional owners, e.g., pension funds, relative to short-term oriented institutional owners, e.g., investment banks, encourage more explorative activities. In addition, I identify CEO ownership as appropriate governance instrument to support explorative activities. I contribute to the exploration‒exploitation literature by adding the principle-agent theory respectively the ownership structure as an important determinant. With the combination of both literature streams, I show that the different interests of shareholders can be negative for a firm’s survival. In doing so, I propose a third perspective‒a firm’s wellbeing‒to extend the principal-agent dilemma.
|
|
Search Terms: exploration‒exploitation | institutional ownership | corporate governance
|
|
Paper is No Longer Available Online: Please contact the author(s).
|
|
|
|
|
|
Governance Through Relative Ownership: Enabling Better Decisions Through Engagement
|
Author: Snigdha Manukonda, Indian Institute of Management, Bangalore
Author: Ramachandran J, IIM Bangalore
|
|
|
|
|
|
|
|
The current paper examines how ownership structure can enable corporate insiders’ engagement with alternative perspectives and improve the quality of strategic decisions. We focus on the interplay between corporate insiders and institutional investors, and examine how their relative ownership vis-à-vis each other could enable the organization to take advantage of unexpected vantage points on key strategic issues. We argue that a formidable but not so disproportionately high relative ownership of institutional investors will goad corporate insiders to pay heed to the alternative perspectives of institutional investors even as it gives them room to reject these perspectives if they deem right. We extend the theory to explore the boundary conditions that impact the extent to which corporate insiders heed institutional investors’ alternative views. We also explore the import of paying heed in dynamic environments. We test our insights in the context of corporate capital allocation decisions as allocation of capital across various competing investment opportunities is a crucial mechanism through which good governance adds value. Using a panel of listed Indian firms, we find that institutional investors’ relative ownership has an inverted-U relationship with value added by allocation. By focusing on how ownership structure enables engagement, as opposed to alignment, we complement and subtly redirect research on ownership structure to embrace the inherently complex nature of strategic decisions.
|
|
Search Terms: corporate ownership structure | corporate governance | strategic decision making
|
|
Paper is No Longer Available Online: Please contact the author(s).
|
|
|
|
|