Session 113

Large Shareholders are Doing it for Themselves

Track O

Date: Monday, October 8, 2012

Track M

Time: 16:30 – 17:45

Paper

Room: Dressing Room 221


Session Chair:

  • Changhyun Kim, Singapore Management University

Title: How Much Does Ownership Type Matter? Evidence from China

Authors

  • Xufei Ma, Chinese University of Hong Kong
  • Markus Fitza, Frankfurt School of Finance and Management
  • Tony Tong, University of Colorado-Boulder

Abstract: This study contextualizes extant research on the sources of performance differences across firms. While most previous work in this area was conducted on publicly traded US firms, we use a large sample of Chinese firms including firms of different ownership types (government owned, collectively owned and privately held firms). We focus on how these different ownership types affect the relative importance of industry, year and firm (internal) effects on firm performance. Our findings indicate that in the transitory Chinese economy ownership types are an important explanatory factor of firm performance and that industry and firm effects vary between different ownership types.

Title: Institutional Ownership and Shareholder Wealth Destruction

Authors

  • Changhyun Kim, Singapore Management University

Abstract: The cumulative increase of institutional investment reinforces maximization of shareholder value as the ultimate corporate goal. Furthermore, managerial discretion has decreased while managerial ownership has actually increased. The board of directors has become more independent than before. Despite these changes in corporate governance ostensibly directed toward shareholder value, the shareholders of acquiring firms in U.S. experienced a huge amount of wealth destruction in the recent M&A wave from the late 1990s to early 2000s. I investigate the role played by institutional investors during this wave. The preliminary results show that they acted as a catalyst of the wave rather than a protector of shareholder’s value. This presents a conundrum whereby actions ostensibly to improve management focus on shareholder wealth have had the opposite effect.

Title: Self-Regulation of Corporate Governance Practices in Russian Companies

Authors

  • Ilya Okhmatovskiy, McGill University

Abstract: We consider internal corporate governance policies of large Russian companies and examine factors that account for the variation of these policies across companies. We distinguish policies regulating governance procedures from policies regulating corporate actions and demonstrate that these policies are affected differently by pressures from “high involvement” and “low involvement” shareholders. We also find that it matters whether this pressure comes from domestic or foreign shareholders. Different policies reflect different approaches to defining “good” corporate governance and this study helps us better understand the emergence and evolution of corporate governance standards in transition economies.

Title: What Determines the Severity of Large Shareholder Expropriation in Transition China?

Authors

  • Helen Wei Hu, University of Melbourne
  • Pei Sun, Fudan University

Abstract: This paper examines how firm-level corporate governance attributes and regional-level institutional environments influenced the severity of controlling shareholder expropriation in Chinese public corporations during the 2005-2010 period. The empirical analysis shows that local governments tended to expropriate more wealth than central government agencies and no less than private entities from their respective listed subsidiaries. Furthermore, the negative association between the intensity of tunneling and the quality of regional institutional environments surrounding the listed companies is only present in those controlled by private entities. Finally, the severity of expropriation is greater in companies with higher selling expenses ratios, which are an established measure of rents captured by management.

All Sessions in Track O...

Sun: 08:00 – 09:15
Session 119: Strategic Leadership
Sun: 09:30 – 10:45
Session 120: Corporate Governance
Sun: 11:15 – 12:30
Session 122: Strategic Leadership and Corporate Governance Complementarities: Why we Are an IG
Sun: 15:15 – 16:30
Session 107: The Benefits of Experience: Vicarious and Otherwise
Mon: 08:00 – 09:15
Session 106: Why do Firms do Bad Things and What Do We Know about It?
Mon: 09:30 – 10:45
Session 103: Reputation: Organizational and Individual Dimensions
Mon: 13:30 – 14:45
Session 112: CEO and TMT Turnover: Firm Implications
Session 214: CEOs and Leadership
Mon: 16:30 – 17:45
Session 113: Large Shareholders are Doing it for Themselves
Tue: 08:00 – 09:15
Session 115: Board Member Characteristics and Board Diversity
Session 137: CEO Human Capital: Take a Little off the Top
Session 254: Capital Markets and Efficiency
Tue: 11:00 – 12:15
Session 111: Why Boards Look the Way They Do: Director Selection
Session 117: Heterogeneous Owner Types and their Influence
Tue: 14:15 – 15:30
Session 108: CEOs Matter, Don\'t They?
Session 116: Discretion and Compensation
Tue: 15:45 – 17:00
Session 114: Adoption of a Practice and its Implications
Tue: 17:30 – 18:45
Session 118: The TMT as a Unit
Session 215: CEO Personality and Characteristics Influencing Decision Making

All Sessions in Track M...

Sun: 08:00 – 09:15
Session 126: Entrepreneurship & Stakeholders - The Future Research Agenda
Sun: 11:15 – 12:30
Session 276: Performance Measurement Tools: A Review of Progress
Mon: 08:00 – 09:15
Session 106: Why do Firms do Bad Things and What Do We Know about It?
Mon: 09:30 – 10:45
Session 15: Human Factors in Stakeholder Strategy
Mon: 13:30 – 14:45
Session 12: Effective Stakeholder Management
Session 138: Value Creation & Appropriation: Take the money and run
Mon: 16:30 – 17:45
Session 113: Large Shareholders are Doing it for Themselves
Tue: 08:00 – 09:15
Session 11: Stakeholders and Corporate Social Performance
Tue: 11:00 – 12:15
Session 117: Heterogeneous Owner Types and their Influence
Tue: 14:15 – 15:30
Session 182: Challenges for Stakeholder Management
Tue: 15:45 – 17:00
Session 10: Stakeholders and Crisis Performance
Tue: 17:30 – 18:45
Session 13: The Problem of Performance in the Theory of the Firm:


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