Author: Sabri Boubaker
Publisher:
ISBN:
Category :
Languages : en
Pages : 40
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Book Description
This study investigates the effects of some characteristics of the French corporate governance model - deemed to foster entrenchment and facilitate private benefits extraction - on the extent of analyst following. The results show that analysts are more likely to follow firms both with high discrepancy level between ownership and control and those controlled through pyramiding. These findings provide empirical support to the argument that minority shareholders value private information on firms with high expropriation likelihood, asking thence for more analyst services. Additional findings show that analysts are reticent to follow firms managed by controlling family members. This is, in part, explained by these firms' reliance on private communication channels rather than public disclosure, producing a poor informational environment.
Author: Hoje Jo
Publisher:
ISBN:
Category :
Languages : en
Pages : 49
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Book Description
We examine the effects of internal and external corporate governance and monitoring mechanisms on the choice of dual-class status and the firm performance of dual-class firms. Employing 736 dual-class firms and 7,027 single-class firms during the period 1996-2002, we find that dual-class firms tend to be larger, and have higher director ownership, higher institutional ownership, lower blockholdings, and a smaller fraction of independent, outside directors on their boards than single-class firms. In addition, we observe that dual-class firms are followed by a smaller number of security analysts. After correcting for endogeneity bias, our regression results show that not only firms with higher analyst coverage, but also firms with higher analyst following and a lower wedge, measured as the difference between voting rights and cash flow rights, or lower managerial entrenchment are strongly associated with Tobin's q. In contrast, blockholders' ownership, board independence, and institutional ownership play a relatively insignificant role in enhancing Tobin's q. We interpret these results to mean that security analysts are the most effective monitoring mechanism that influence both the dual-class choice and firm performance. Our results are not attributed either to the difference in firm size or to an industry effect.
Author: Hoang N. Pham
Publisher: Routledge
ISBN: 1000540278
Category : Business & Economics
Languages : en
Pages : 190
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Book Description
The relationship between ownership structure and firm performance has been studied extensively in corporate finance and corporate governance literature. Nevertheless, the mediation (path) analysis to examine the issue can be adopted as a new approach to explain why and how ownership structure is related to firm performance and vice versa. This approach calls for full recognition of the roles of agency costs and corporate risk-taking as essential mediating variables in the bi-directional and mediated relationship between ownership structure and firm performance. Based on the agency theory, corporate risk management theory and accounting for the dynamic endogeneity in the ownership–performance relationship, this book develops two-mediator mediation models, including recursive and non-recursive mediation models, to investigate the ownership structure–firm performance relationship. It is demonstrated that agency costs and corporate risk-taking are the ‘missing links’ in the ownership structure–firm performance relationship. Hence, this book brings into attention the mediation and dynamic approach to this issue and enhances the knowledge of the mechanisms for improving firm’s financial performance. This book will be of interest to corporate finance, management and economics researchers and policy makers. Post-graduate research students in corporate governance and corporate finance will also find this book beneficial to the application of econometrics into multi-dimensional and complex issues of the firm, including ownership structure, agency problems, corporate risk management and financial performance.
Author: Mark H. Lang
Publisher:
ISBN:
Category :
Languages : en
Pages : 44
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Book Description
This paper uses a sample of over 2,500 firms from 27 countries to investigate the relation between ownership structure, analyst following, investor protection and valuation. We find that analysts are less likely to follow firms with potential incentives to withhold or manipulate information, such as when the Family/Management group is the largest control rights blockholder. Further, this relation is stronger for firms from low shareholder protection countries. Using valuation regressions that take into account potential endogeneity between analyst following and firm value, we find a positive valuation effect when analysts cover firms that have both potentially poor internal governance and weak country-level external governance. Overall, our findings suggest that corporate governance plays an important role in analysts' willingness to follow firms and that increased analyst following is associated with higher valuations, particularly for firms likely to face governance problems.
Author: Mario Levis
Publisher: Edward Elgar Publishing
ISBN: 1781955379
Category : Business & Economics
Languages : en
Pages : 599
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Book Description
The chapters offer some important new insights into issues that will be of interest not only to the academic community but also to professionals involved in the preparation, structure and execution of such transactions, market regulators, and private a
Author: Bok Baik
Publisher:
ISBN:
Category :
Languages : en
Pages : 53
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Book Description
This study examines the effect of equity ownership by managers on a firm's information environment vis-agrave;-vis its effect on analyst forecast accuracy and analyst following. We collect a sample of over 26,000 observations on managerial ownership during 1988-2002 and find that managerial ownership is negatively related to both the accuracy of analysts' consensus earnings forecasts and analyst coverage. Interestingly, this negative relation is most pronounced for firms with impending quot;bad news.quot; We also find that firms with greater managerial ownership are less likely to issue a management earnings forecast, particularly in anticipation of bad news. Our results are consistent with the view that managerial entrenchment leads to information opacity, reducing forecast accuracy and discouraging analyst coverage. We further document a positive relation between analyst coverage and firm value, particularly for firms with greater managerial ownership and a relatively poor governance structure, suggesting that investors view analyst coverage as an alternative governance mechanism to mitigate managerial entrenchment. However, our evidence of reduced analyst following indicates that this monitoring activity appears to be lacking when it would be most beneficial.
Author: Stephen P. Ferris
Publisher: Emerald Group Publishing
ISBN: 1787565378
Category : Business & Economics
Languages : en
Pages : 232
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Book Description
Advances in Financial Economics Vol 20 is peer reviewed and focusses on International Corporate Governance.
Author: OECD
Publisher: OECD Publishing
ISBN: 9264796169
Category :
Languages : en
Pages : 142
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Book Description
This report provides an evidence-based overview of developments in capital markets globally leading up to the COVID-19 crisis. It then documents the impact of the crisis on the use of capital markets and the introduction of temporary corporate governance measures.
Author: Nicolas Eugster
Publisher:
ISBN:
Category :
Languages : en
Pages : 60
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Book Description
This paper examines the relationship between ownership structure, analyst coverage, and forecast error for a sample of 160 companies listed on the Swiss Exchange for the period 2003-2013. A distinction is made between family firms, widely held firms, and firms owned by another blockholder. I utilize the subsample of family firms to gauge the following characteristics: generation, involvement in management, use of dual class shares, and excess control by the largest shareholder. The results show that family firms are less frequently followed by analysts, but their earnings are better forecasted. Furthermore, by looking only at family firms and their characteristics, I find evidence that the higher the likelihood of expropriation, the higher the number of analysts following them in comparison with other family firms; however, I find little association between the likelihood of expropriation and forecast error.
Author: Choonsik Lee
Publisher:
ISBN:
Category :
Languages : en
Pages : 40
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Book Description
We explore the relation between corporate governance and the informational efficiency of prices (IEP). We find that IEP increases with the quality of corporate governance in a large cross-section of firms. We show that firms with better governance structures file Form 8-K reports more promptly and have more accurate analysts' earnings forecasts, suggesting that corporate voluntary disclosures and analyst forecasts are channels through which corporate governance affects IEP. The positive relation between IEP and governance quality cannot be attributed to reverse causality or other confounding factors (e.g., analyst following, stock market liquidity, and institutional ownership). On the whole, our results show that better governance structures lead to higher IEP by improving the speed and extent of corporate information disclosures.
