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A B C D E F G H I J K L M N O P Q R S T U V W X Y Z |
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Author(s) &Journal |
Sample
& Period[2]
|
Ownership
|
Performance
variable(s) |
Other variable(s):
Controls
& dependents[5] |
Statistical
methods |
Main
results |
Preferred
explanation |
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Agrawal and Knoeber [1996], Journal of Financial and Quantitative Economics |
383
large 1987. |
1)
% insider ownership by directors and officers. 2) Dummy for presence of founding
CEO. 3) % of shares held by above 5% blockholders. Data
from Disclosure. |
Tobin's
Q by market value of stock, preferred stock and debt to book value of assets. |
1)
Size by assets. 2) Standard deviation of stock return. 3) Dummy for regulated
firms. 4) Years of CEO tenure. 5) Number of officers and directors. 6)
R&D to assets. 7) Number of institutional shareholders. 8) Dummy for NYSE
listing. 9) Firm diversification. 10) # of outside CEO job opportunities. 11)
Cash flow return. 12) Control activity by % of acquired firms in each
two-digit SIC. 13) Advertising/assets Dependent variables: 1)
Insider ownership. 2) Blockholder ownership. 3) Institutional ownership. 4)
Fraction of non-officers in the board. 5) Years of CEO employment. 6)
Leverage by dept to firm value. |
OLS
and 2SLS regression. Test for a roof-shaped relation by including the squared
insider ownership. |
OLS on Tobin's Q: Tobin's Q decreases
significantly with board outsiders, leverage, and corporate control activity.
It increases significantly with insider ownership. 2SLS on Tobin's Q: Tobin's Q decreases significantly with board
outsiders. 2SLS without Tobin's Q: Shareholdings
by blockholders and institutional investors increases significantly by corporate
control activity. Institutional ownership decreases significantly with
blockholder ownership and vise versa. Leverage increases significantly with insider
ownership and outside board membership but not vise versa. Years of CEO employment
decreases significantly with institutional and blockholder ownership, but not
vise versa. |
The
'natural selection' argument. |
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Agrawal and Mandelker [1990], Journal of Financial and Quantitative Analysis |
356
US listed firms who announced adoption of antitakeover charter amendments. 1979-85. |
1)
% ownership by all institutional shareholders. 2) Concentration of
institutional ownership by a Herfindal index. 3) % ownership by two largest
5% blockholders. 4) Insider ownership by managers and directors. |
41-days
cumulative abnormal return, CAR, by the firm over the interval (AD-40, AD+1)
where AD is the announcement date. |
1)
Size by log of stock market value. 2) Dummies for the different types of
antitakeover amendments. |
Event-study.
OLS regression. Checks for simultaneous effect of type of amendment and %
institutional ownership by including interaction terms. |
CAR
decreases significantly with the adoption of antitakeover amendments. CAR increases
for increasing institutional ownership, concentration of institutional ownership,
and ownership by 5% blockholders. However, no evidence of a difference in CAR
for different levels of insider ownership. The OLS regression confirms the
above results regarding institutional and insider ownership. It also shows a
higher decrease in CAR the more entrenching the amendments. |
The
entrenchment argument. Note that managers can entrench themselves using
anti-takeover provisions instead of stock ownership. |
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Baesel and Stein [1979], Journal of Financial and Quantitative Analysis |
Canadian
data |
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|
Find
that managers make abnormal returns when trading in their firm's stock. |
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obviated |
Presence
of large-block equity holder or not. |
Abnormal
returns |
|
Event
study. |
Significant
and positive performance on announcement of outsider’s acquisition of a large
equity position, but only persistent if takeover or other corporate
restructure follows. |
The
incentive alignment argument. |
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150
large industrial 1960-67. |
As
Palmer [1973]. MC
£10% single block of common stock. 30%>WOC
>10%. SOC
³30%. AOC=WOC+SOC |
1)
A risk adjusted return on sales. 2) Return on equity. |
Monopoly
power by barriers to entry or market share. |
Use
binary regression equivalent of a two-way analysis of variance with
interactions. The sample is classified in order to control for monopoly
power. |
Among
firms with a large degree of monopoly power WOC and AOC firms are significantly
more profitable than MC firms if the risk adjusted measure of return is used.
Otherwise not. |
The
incentive alignment argument coupled with a competition argument. |
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Boyle, Carter and Stover [1998], Journal of Financial and Quantitative
Ananlysis |
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Find
that insider ownership is weakly (10% level) negatively related to the number
of anti-takeover provisions at levels of ownership below 10,3%. This is
evidence of substitution between two entrenchment mechanism. |
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As
Monsen et al [1968]: 72 firms of
the 500 largest |
MC
£5% single block of voting control. OC
³10% and evidence of active control, or, ³20%. |
As
Monsen et al [1968]: Return
on equity. Observed 1952-63. |
1)
Industry type by major product. 2) Size of firm by sales. |
Analysis
of variance and covariance analysis. |
The
results are similar to Monsen et al.
[1968] since their studies are almost identical. Boudreaux, however, is also
interested in risk issues. |
The
incentive alignment argument. |
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#
of privately negotiated share repurchases. |
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For
repurchases marking the termination of a takeover bid the non-participating
shareholders take a highly significant loss of 13%. |
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Brickley, Lease and Smith [1988], Journal of Financial Economic |
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Institutional
shareholders vote more actively on antitakeover amendments than other shareholders
and they more actively oppose proposals that seem harmful to shareholders.
This could hint a positive relation between institutional ownership and
corporate performance. |
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- Copyright 1997-2008, ViamInvest. Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. Legal notice. |
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