The effects of ownership structure on corporate restructuring

Abstract

c This paper investigates the relationship between ownership structure and corporate restructuring in a sample of 93 surviving public Fortune 500 firnu during the period 1981-87. The results show that blockholder ownership is associated sign$cantly with corporate restructuring, suggesting that many managers restructured their corporations during the 1980s only when pressured to do so by large shareholders.

The Impacts of Free Cash Flows and Agency Costs on Firm Performance

“…Kester [18] and Gul and Tsui [19] took the refraining approach and argued that an increase in financial leverage would sufficiently reduce the agency costs since management is subjective to legal bonding of repaying debt and interest, which in effect might decrease the abuse of free cash flows. In addition, Shleifer and Vishny [20] and Bethel and Liebeskind [21] proposed that corporate takeover could discourage management's incentive to perquisite consumption and shirking behavior. Furthermore, Crutchley and Hansen [22] implied that the firm could attempt to distribute idle cash flows to stockholders by stock repurchase or dividend payments to avoid the abuse of free cash flows.…”

Theory and research in strategic management: swings of a pendulum

“…Internal governance mechanisms such as board composition (e.g., Baysinger & Hoskisson, 1989;Baysinger, Kosnik, & Turk, 1991;Hill & Snell, 1988;Zahra & Pearce, 1989), ownership structure (e.g., Bethel & Liebeskind, 1993;Hill & Snell, 1988;Hoskisson & Turk, 1990;Kosnik, 1990) and executive compensation (e.g., Gomez-Meija, 1994;Hoskisson, Hitt, Turk, & Tyler, 1989;Tosi & GomezMeija, 1989) may be used to help align the interests between shareholders and managers. External governance devices, such as the market for the corporate control, become more relevant (active) when internal governance devices are unable to mitigate agency costs (Johnson, Hoskisson, & Hitt, 1993;Walsh & Kosnik, 1993;Walsh & Seward, 1990).…”

The Relationship between R&D investment and Ownership Structure in KOSDAQ Pharmaceutical Firms

“…One of the key assumptions of the agency theory is that if the manager owns shares, his or her motivation for risk preference increases [21]. Though this assumption was proved in numerous studies [8][ [17][18][19][20][21], it was also challenged by quite a few studies in Korea as well as overseas [22][23][24][25]. However, the findings of this study imply that the relationship between the shareholding ratio of major shareholders and R&D investment is carried out through the agency theory.…”