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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 |
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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 mechanisms. |
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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 1997-2010, ViamInvest. Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. Legal notice. |
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