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on Business Economics |
| By: | Chiraz Ben Ali; Frédéric Teulon |
| Abstract: | Similar to the Security Exchange Commission (SEC), the French Stock Exchange Authority (AMF) issued new board requirements to enhance manager control after financial scandals (2008-2009). This study investigates the relation between corporate governance and CEO pay levels after taking into acc²ount unobservable firm effects, time-varying industry effects, size, and performance. Using a sample of 290 firm-years observations from SBF 120 Index companies (2009-2011), we find that CEO pay is positively associated to (1) board size, (2) the number of board meetings and (3) compensation committee independence. Consistent with Guthrie et al. (2012) findings, our results suggest serious doubt on the effectiveness of new independence board requirement in constraining CEO compensation as suggested by the managerial power hypothesis. |
| Keywords: | Board of directors,Board meeting frequency, CEO compensation, Corporate governance. |
| Date: | 2014–01–06 |
| URL: | http://d.repec.org/n?u=RePEc:ipg:wpaper:2014-045&r=bec |
| By: | Wided Bouaine; Lanouar Charfeddine; Mohamed Arouri; Frédéric Teulon |
| Abstract: | This paper uses panel data from 271 U.S. firms to empirically examine the relationship between the departure of a firm’s CEO and that firm’s performance. Results of our analysis reveal a significant relationship between CEO departure type and firm performance. Specifically, we found that the departure of entrenched CEOs negatively affects current and future firm performance. Results also demonstrate that board size and the presence of independent administrators moderates the relationship between CEO departure type and firm performance. This suggests that entrenched CEOs can have informal associations with independent administrators. |
| Keywords: | departure type, current and future performance, board independence,entrenchment. |
| Date: | 2014–02–12 |
| URL: | http://d.repec.org/n?u=RePEc:ipg:wpaper:2014-087&r=bec |
| By: | Chiraz Ben Ali; Cédric Lesage |
| Abstract: | Family businesses are an important part of the world economy (Anderson and Reeb, 2003) and show significant differences in their corporate governance compared to non-family firms. Although displaying evident unique features, family firms have received relatively little attention as distinct from their equivalents in publicly held firms. Our study contributes to this growing research and investigates empirically the relationship between family shareholding and audit pricing. Using a sample of 3291 firm-year observations of major U.S. listed companies, for the period 2006- 2008, our results demonstrate that audit fees is negatively associated to family shareholding after taking into account unobservable firm effects, time-varying, industry effects and traditional control variables. The empirical results are robust to alternative family shareholding measures and estimation model specifications. Our results are consistent with the convergence-of-interests hypothesis suggesting that family firms face lower manager/shareholders agency costs. Auditors charge lower fees for family firms because of lower information asymmetry and risk as the controlling family is well informed about the firm and is better able to monitor managerial decisions. |
| Keywords: | Family firms, Audit Fees, Agency Conflicts, Corporate Governance |
| Date: | 2014–01–06 |
| URL: | http://d.repec.org/n?u=RePEc:ipg:wpaper:2014-043&r=bec |
| By: | Frédéric Loss; Gwenaël Piaser |
| Abstract: | Family businesses are an important part of the world economy (Anderson and Reeb, 2003) and show significant differences in their corporate governance compared to non-family firms. Although displaying evident unique features, family firms have received relatively little attention as distinct from their equivalents in publicly held firms. Our study contributes to this growing research and investigates empirically the relationship between family shareholding and audit pricing. Using a sample of 3291 firm-year observations of major U.S. listed companies, for the period 2006- 2008, our results demonstrate that audit fees is negatively associated to family shareholding after taking into account unobservable firm effects, time-varying, industry effects and traditional control variables. The empirical results are robust to alternative family shareholding measures and estimation model specifications. Our results are consistent with the convergence-of-interests hypothesis suggesting that family firms face lower manager/shareholders agency costs. Auditors charge lower fees for family firms because of lower information asymmetry and risk as the controlling family is well informed about the firm and is better able to monitor managerial decisions. |
| Keywords: | Family firms, Audit Fees, Agency Conflicts, Corporate Governance |
| Date: | 2014–01–01 |
| URL: | http://d.repec.org/n?u=RePEc:ipg:wpaper:2014-042&r=bec |
| By: | Klapper, Leora; Love, Inessa; Randall, Douglas |
| Abstract: | This paper uses new panel data on the number of new firm registrations in 109 countries during 2002-2012 to study the relationship between entrepreneurship and economic growth. The data show strong evidence of a pro-cyclical pattern in entrepreneurship. An examination of heterogeneous relationships between new firm registration and the business cycle finds that higher levels of financial development and better business environments are associated with stronger pro-cyclicality of entrepreneurship both across countries and within countries over time. The results are robust to various measures of business regulation, such as the cost and time of starting a new firm and closing an insolvent firm. These findings suggest that fostering an efficient regulatory environment for the financial and private sector is important for encouraging a speedier recovery in the formation of new firms during economic expansions and aiding the efficient wind-down of insolvent firms during economic slowdowns. |
| Keywords: | Environmental Economics&Policies,Business in Development,Business Environment,Competitiveness and Competition Policy,E-Business |
| Date: | 2014–02–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:6775&r=bec |
| By: | Güth, Werner; Pull, Kerstin; Stadler, Manfred; Zaby, Alexandra |
| Abstract: | Based on the acquiring-a-company game of Samuelson and Bazerman (1985), we theoretically and experimentally analyze the acquisition of a firm. Thereby we compare cases of symmetrically and asymmetrically informed buyers and sellers. This setting allows us to predict and test the effects of information disclosure as prescribed by two recently implemented directives of the European Union, the Transparency and the Takeover-Bid Directive. Our theoretical and experimental results suggest a welfare-enhancing effect of compulsory information disclosure. Hence, the EU Transparency and the EU Takeover-Bid Directive should both be welfare enhancing. -- |
| Keywords: | acquisition of firms,disclosure of private information,experimental economics |
| JEL: | C91 D61 D82 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:tuewef:69&r=bec |
| By: | Gu, Wulong Lafrance, Amelie |
| Abstract: | This paper examines two aspects of productivity growth in Canada's broadcasting and telecommunications industry. The first is the extent to which aggregate MFP growth in the sector came from scale economies as opposed to technical progress. The second is the extent to which aggregate labour productivity growth and MFP growth came from within-firm growth, and from the effect of reallocation due to firm entry and exit and within incumbents' the dynamic forces associated with competitive change. |
| Keywords: | Information and communications technology, Economic accounts, Telecommunications industries, Information and communications technology sector, Productivity accounts |
| Date: | 2014–02–06 |
| URL: | http://d.repec.org/n?u=RePEc:stc:stcp5e:2014089e&r=bec |
| By: | Cláudia Frias Pinto (Instituto Politécnico de Leiria); Fernando Ribeiro Serra (Uninove – Universidade Nove de Julho); Manuel Portugal Ferreira (Instituto Politécnico de Leiria) |
| Abstract: | National cultures and cultural differences provide a crucial component of the context of international business (IB) research. We conducted a bibliometric study of the articles published in seven leading IB journals, over a period of three decades, to analyze how “national culture” has been impacting in IB research. Co-citation mappings permit us to identify the ties binding works dealing with culture and cultural issues in IB. We identify two main clusters of research each comprising two sub-clusters, with Hofstede’s (1980) work setting much of the conceptual and empirical approach on culture-related studies. One main cluster entails works on the conceptualization of culture and its dimensions and other cluster on cultural distance. This conceptual framework captures the extant IB research incorporating culture-related concepts and influences. |
| Keywords: | culture, culture in international business, bibliometric study, IB research |
| JEL: | M0 M1 |
| Date: | 2014–02–07 |
| URL: | http://d.repec.org/n?u=RePEc:pil:wpaper:107&r=bec |
| By: | Matthew T Cole (Florida International University); Ronald B Davies (University College Dublin) |
| Abstract: | Until recently, government procurement bidding processes have generally favored domestic firms by awarding the contract to a domestic firm even if a foreign firm tenders a lower bid, so long as the difference between the two is sufficiently small. This has been replaced by an agreement abolishing this practice. However, the presence of other trade barriers, such as tariffs, can continue to disadvantage foreign firms. We analyze the bidding strategies in such a game and show that when domestic profits are valued, tariffs will be used to discriminate against foreign firms. Furthermore, we find that optimal tariffs can be more protectionist than the optimal price preference, resulting in lower expected domestic welfare and total surplus. |
| Keywords: | Government Procurement; Tariffs; Price Preference |
| JEL: | F13 H57 F12 |
| Date: | 2014–02–10 |
| URL: | http://d.repec.org/n?u=RePEc:ucn:wpaper:201401&r=bec |
| By: | Neuberger, Doris; Räthke-Döppner, Solvig |
| Abstract: | To sustain growth in an aging economy, it is important to ease the financing of small firms by bank loans. Using bank internal data of small business loans in Germany, we examine the determinants of loan rates in the period 1995-2010. Beyond characteristics of the firm, the loan contract, and the lending relationship, demographic aspects matter. However, collateral and relationship lending play a larger role in loan pricing than the entrepreneur's age. Banks do not seem to discriminate older borrowers by higher loan rates. We rather find statistical discrimination of younger borrowers because of their lower wealth. Single entrepreneurs obtain cheaper loans than married ones. Firms in peripheral regions with low population density are disadvantaged by higher loan rates compared to those in agglomerated regions. -- |
| Keywords: | small business finance,savings banks,relationship lending,aging,demographic change |
| JEL: | D14 E43 G21 J14 L26 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:roswps:134&r=bec |
| By: | Serguey Braguinsky; Atsushi Ohyama; Tetsuji Okazaki; Chad Syverson |
| Abstract: | We explore how changes in ownership and managerial control affect the productivity and profitability of producers. Using detailed operational, financial, and ownership data from the Japanese cotton spinning industry at the turn of the last century, we find a more nuanced picture than the straightforward “higher productivity buys lower productivity” story commonly appealed to in the literature. Acquired firms’ production facilities were not on average less physically productive than the plants of the acquiring firms before acquisition, conditional on operating. They were much less profitable, however, due to consistently higher inventory levels and lower capacity utilization—differences which reflected problems in managing the uncertainties of demand. When purchased by more profitable firms, these less profitable acquired plants saw drops in inventories and gains in capacity utilization that raised both their productivity and profitability levels, consistent with acquiring owner/managers spreading their better demand management abilities across the acquired capital. |
| JEL: | D2 G3 L2 L6 O3 |
| Date: | 2014–02 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:19901&r=bec |