Agency Costs of Controlling Minority Shareholders

Cronqvist, Henrik; Nilsson, Mattias

doi:10.2307/4126740

Cited by 545 publications

(430 citation statements)

References 44 publications

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“…In a rights-preserving offer, existing shareholders are entitled to preemptive rights to purchase new shares in proportion to their holdings. To maintain the control power of the firm, large shareholders are expected to pressure the firm into choosing rights-preserving offers instead of a placing (Cronqvist and Nilsson, 2003).…”

Section: Other Determinants Of Capital Structure and Financing Decisionsmentioning

confidence: 99%

Ownership, capital structure and financing decision: Evidence from the UK

Sun

Ding

Guo

et al. 2016

The British Accounting Review

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(2016) 'Ownership, capital structure and nancing decision : evidence from the UK.', British accounting review., 48 (4). pp. 448-463. Further information on publisher's website:https://doi.org/10.1016/j.bar.2015.04.001Publisher's copyright statement: NOTICE: this is the author's version of a work that was accepted for publication in The British Accounting Review. Changes resulting from the publishing process, such as peer review, editing, corrections, structural formatting, and other quality control mechanisms may not be re ected in this document. Changes may have been made to this work since it was submitted for publication. A de nitive version was subsequently published in The British Accounting Review, Volume 48, Issue 4, December 2016, 10.1016/j.bar.2015.04.001. Use policyThe full-text may be used and/or reproduced, and given to third parties in any format or medium, without prior permission or charge, for personal research or study, educational, or not-for-pro t purposes provided that:• a full bibliographic reference is made to the original source • a link is made to the metadata record in DRO • the full-text is not changed in any way The full-text must not be sold in any format or medium without the formal permission of the copyright holders.Please consult the full DRO policy for further details. show a non-monotonic relation between MSO and the debt ratio, supporting two competing theories: interest alignment theory and the management entrenchment hypothesis. Nevertheless, institutional ownership is found to be positively related to firm leverage levels. Our results further suggest that firms with concentrated MSO decrease their leverage by increasing the probability of issuing equity over bonds, an effect strengthened during hot market periods.

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Section: Other Determinants Of Capital Structure and Financing Decisionsmentioning

confidence: 99%

Ownership, capital structure and financing decision: Evidence from the UK

Sun

Ding

Guo

et al. 2016

The British Accounting Review

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“…In contrast, Claessens et al (2002) show that in Southeast Asian countries, family firms underperform relative to nonfamily firms. Cronqvist and Nilsson (2003) find that in Sweden, the value of family firms is largely discounted. Barth et al (2004) show that in Norway, family firms owned and managed by the founding family are less productive than nonfamily firms.…”

Section: Previous Studiesmentioning

confidence: 88%

The Rising Son Under the Shadow of Company Communities: Do Japanese Family Firms Really Excel?

et al. 2015

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Japanese corporate governance has long attracted attention from scholars due to its stark differences from the Anglo-Saxon model. Indeed, scholars have pointed to the unique aspects of Japanese governance to explain Japan's economic miracle, only to reverse their view, citing it as a major factor behind the lost decades of the '90s and '00s. A recent study by Mehrotra, Morck, Shim, and Wiwattanakantang (2013) brings Japanese economic governance back into the spotlight. In their analysis of family-run firms, the authors find that although inherited control is linked to poor firm performance in other developed economies, heir-run firms actually perform well in Japan. In search of a convincing explanation for this finding, we studied the same sample of firms over the same period and reached varying results. Our paper relies on the concept of a "company community" to explain why Japanese family firms appear to outperform non-family firms. The company community, consisting of management and shareholders, is the core of the Japanese non-family listed firm. Japanese family firms, on the other hand, modify the characteristics of the company community to avoid critical defects in monitoring, incentives, and external labor markets. Rather than concluding that Japanese family firms performed well, the more plausible explanation may be that Japanese listed firms on the whole performed badly.

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“…Claessens et al (2002) for Southeast Asian countries, Morck et al (2000) for Canada, Cronqvist and Nilsson (2003) for Sweden find that family firms are characterized by a worse performance. Bertrand and Schoar (2006) show that stronger family ties (as measured in the World Values Survey) are associated with a larger fraction of total market value controlled by families, but also with lower levels of per capita GDP, fewer publicly traded firms and a smaller average size of firms.…”

Section: Family Firms and Performancementioning

confidence: 99%