effect of managerial ownership of shares and voting concentration on performance by Riccardo Curcio

Cover of: effect of managerial ownership of shares and voting concentration on performance | Riccardo Curcio

Published by London School of Economics, Centre for Economic Performance in London .

Written in English

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StatementRiccardo Curcio.
SeriesEconomic performance discussion paper series / London School of Economics, Centre for Economic Performance -- no.185, Economic performance discussion paper (London School of Economics, Centre for Economic Performance) -- no.185.
ID Numbers
Open LibraryOL19559260M

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We investigate the empirical relationship between managerial ownership of shares and corporate performance, using a panel dataset of UK manufacturing companies.

The two measures of performance investigated are: market valuation, as expressed by Tobin's Q, and total factor productivity growth, measured by estimating a production function. We investigate the empirical relationship between managerial ownership of shares and corporate performance, using a panel dataset of UK manufacturing companies.

The two measures of performance investigated are: market valuation, as expressed by Tobin''s Q, and total factor productivity growth, measured by estimating a production function.

Furthermore, as managers in the present sample remain entrenched up to an ownership level of 41%, the results suggest that entrenchment effects dominate the relationship between firm performance and managerial ownership at generally higher levels of managerial ownership than is the case for the by: The effect of managerial ownership of shares and voting concentration on performance.

By R. Curcio. Abstract. We investigate the empirical relationship between managerial ownership of shares and corporate performance, using a panel dataset of UK manufacturing companies.

and the effects of the concentration of voting rights which is Author: R. Curcio. The Mediating Effect of the Managerial Ownership towards the Influence of the Board of Directors on the Firm Performance among Jordanian Public Shareholders Companies pdf Content uploaded by.

Various papers have examined the effect of managerial voting control through ownership on firm value. 6 For example, Morck et al. (), McConnell and Servaes () and Holderness et al. () document a non-linear relationship between Tobin's Q and managerial ownership and argue that the negative effects of voting rights attached to.

The discussion in prior research regarding the role of managerial ownership as an incentive mechanism and its effects on corporate performance focuses primarily on the agency problems arising from the separation of ownership and control (Berle and Means, ) and the misaligned incentives between managers and shareholders (Jensen and Meckling.

Ownership Concentration, Managerial Ownership and Firm Performance: Evidence from Turkey. This study examines the effects of ownership concentration and managerial ownership on the profitability and the value of non-financial firms listed on the Istanbul Stock Exchange (ISE) in the context of an emerging market.

A class voting arrangement stipulates two separate elections with the superior voting stock entitled to elect a majority of the board.

Managerial ownership of voting and common stock cash flow rights The ownership figures reported in table 2 compare managers' holdings of the superior voting class to their holdings of the inferior voting class.

Managerial ownership of voting rights Managers of a public corporation presumably own shares in that corpora- tion for the underlying ownership rights they confer, i.e., for residual cash flow and/or voting rights. The managerial incentive effects associated with residual. This study aimed to find out the effect of managerial ownership, financial performance, corporate competition on stock prices with capital structure as the intervening variable in the coal mining companies listed on the Indonesia Stock Exchange.

Managerial ownership variables by the shareholding presentation. Financial performance variables by Total Asset Turnover (TATO). The concentration of ownership is split into four separate groups of owners: family ownership, foreign ownership, individual ownership and institutional ownership.

The results reported in Table 3 indicate family and foreign ownership concentration have positive and effect of managerial ownership of shares and voting concentration on performance book effect on firm performance.

Ownership Concentration and Performance of Privately-Held Firms with Multiple Owners and the Moderating Effect of Managerial and Corporate Ownership: Evidence from. This study is also interested in examining the effect of the Split Share Structure Reform on the relationship between state ownership and firm performance.

A reform dummy variable is created: equal to one for years from onwards, and 0 otherwise. wealth effect of insider ownership is unambiguously positive for both measures. We also test for the effects of ownership concentration for other categories of owners and find that while institutional ownership improves the performance in the USA, financial institutions have a negative impact in other Anglo-Saxon countries and in Europe.

Ownership structure was explained through three dimensions: ownership concentration, managerial ownership, and institutional ownership. As for performance, it was measured by two variables: ROA. inverse-U shaped effects of managerial ownership can be explained by an incentive-entrenchment tradeoff (Stulz, ).

Direct managerial ownership is small, however, for most East Asian corporations and empire building by unaccountable managers cannot account for the possible negative relationship between ownership concentration and valuation. The study estimates a series of regressions using pooled data for a sample of Sri Lankan-listed firms to investigate the impact of ownership concentration and structure on firm performance based.

and company performance and that the effect of ownership concentration is stronger for dominantly owned by legal person (1) shareholders than for state owned enterprises. Another finding of Xu and. The current research analyzes the effect of ownership structure (both insider ownership—board and managerial ownership, blockholder ownership—and institutional ownership concentration.

Downloadable. This study examines the effects of ownership concentration and managerial ownership on the profitability and the value of non-financial firms listed on the Istanbul Stock Exchange (ISE) in the context of an emerging market.

We measure the firm's performance by Return on Assets (ROA) and Tobin's Q ratios, where the former measures profitability and the latter the value of the firm. shares on other than a one-share-one-vote basis. Thus most empirical studies of the effect of managerial control on firm value in the United States have focussed on control through share ownership.

Evaluating the effect of an increase in managerial control through share ownership, however, is subject to its own problems. hypothesis in the separation of ownership and control literature is that concentrated ownership is associated with higher profitability.

Indeed, there have been dozens of such studies examining the relationship between ownership concentration and firm performance beginning in the s and continuing to the present time (Bentson, ). Introduction. The ownership structure and the effect of the corporate governance mechanism on firm behavior are some of the most debated issues in business and management literature since the seminal article of Berle and Means ().Most studies have tried to identify effective mechanisms and requirements for solving agency problems arising for top management in the situation of diffuse.

Performance effects of managerial equity holdings are predicted on the basis of the managerial, neo-classical economic, and agency theory models. Within the managerial framework, managerial equity ownership should serve to attenuate the problem of separation of ownership and control by re-uniting the two constructs.

Second, the relationship between CSR and firm performance shows the same results with the interaction of CEO power. Thirdly, interaction of the managerial ownership with CSR has a significant positive relationship with firm performance.

Fourth, the interaction of the ownership concentration with CSR has a positive effect on firm performance. Springer published a monograph with a chapter of A.

Kubíček and O. Machek. Book title: Corporate Governance in Central Europe and Russia: Framework, Dynamics, and Case Studies from Practice Chapter contents: The contribution Ownership Concentration and Performance of Privately-Held Firms with Multiple Owners and the Moderating Effect of Managerial and Corporate Ownership: Evidence.

For example, assume the purchase price of $25 per share of Targeted XYZ Co. consists of two shares of an acquirer valued at $10 each and $5 in cash. But if the acquirer’s shares. We find independent directors, managerial shareholding, ownership concentration have a positive and significant impact on operating performance of acquiring firms.

However, the related party transactions exert a negative and significant effect on matched control adjusted ROA. Mueller & Spitz [26], managerial ownership is expected to have a non-linear moderating effect on the relationship between ICP and firm value.

This means that the effect is positive as managerial ownership increases but beyond a certain level of managerial ownership the positive effect is expected to invert.

shareholding concentration and firm performance, Kocenda and Svejnar () only higher levels of managerial ownership. As regards the effects of foreign investment on firm performance, it is argued that ownership of voting rights and ownership of cash flow rights.

Corporate ownership is. The initial view of the advantages of ownership concentration in joint stock companies was determined by the concern about the opportunistic managerial behavior.

The growing importance of knowledge and human capital in the operation of firms shifts the focus of concern: excessive ownership concentration may stifle managerial initiative. ownership is typified with low ownership concentration. Characteristics of dispersed ownership are the separation of risk over more shareholders and the specialization by the management (Thomsen and Pedersen, ).

In a US company with ‘large shareholders’, there is a group who hold a sizable fraction of all voting shares. performance across ownership structures (Andreyeva,Repei, ). However the later two works produced contradictive evaluations of the effects of insider and outsider ownership on performance indicators.

This indicates a necessity to further explore this issue in order to establish more clear evidence on ownership structures effects. The effects of ownership concentration on firm performance are theoretically complex and empirically ambiguous.

Conceptually, concentrated ownership may improve performance by increasing monitoring and alleviating the free-rider problem in takeovers (Shleifer and Vishny, ), but other mechanisms may work in the opposite direction.

Most. Potentially biasing performance ratios. By keeping its ownership of voting shares below 50% a company can technically meet the rules for applying the equity method and at the same time report investee assets and liabilities "off balance sheet. As a result it. Managerial Share Ownership and Operating Performance: Do example, managerial entrenchment effects associated with practical control may take place at lower levels of ownership.

In spite of the aforementioned differences, there is US listed firms, argues that ownership concentration is higher than previously reported. However. We investigate the relationship between managerial share ownership (MSO) and earnings as a measure of operating performance in Australia.

To mitigate potential earnings management, we also use discretionary accrual adjusted earnings as an alternative measure of performance. on the positive effects of managerial ownership on firm economic and financial performance. We also find that firms with relatively higher ownership concentration or/and firms with shares listed on the Stock Exchange on average perform better.

Listing on the. managerial ownership. In that model, the entrenchment costs of manager ownership relate to managers' ability to block value-enhancing takeovers. McConnell and Servaes () provide empirical support for this relation- ship for U.S.

firms. But ownership structures exhibit relatively little concentration in the United States. The Impact of Ownership Concentration on Firm Performance: Evidence from an Emerging Market Show all authors.

The effect of ownership structure on share price volatility of listed companies in Tehran Stock Exchange: Understanding the determinants of managerial ownership and the link between ownership and performance.Spitz () report a positive effect of managerial ownership up to an 80 percent level.

Again, other authors (e.g., Demsetz and Lehn, ) argue that there is no relationship between managerial ownership and firm value since the ownership structure is an endogenous outcome of competitive selection in which various cost advantages and.Findings.

Results show that Chinese CG structure is endogenously determined by the CG mechanisms investigated: there is no relationship between board size (including independent directors) and firm performance; CEO duality has a significantly negative effect on firm performance; concentration of ownership has a significantly positive influence on firm performance; managerial ownership is.

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