nep-cfn New Economics Papers
on Corporate Finance
Issue of 2014‒02‒21
four papers chosen by
Zelia Serrasqueiro
University of the Beira Interior

  1. Linear Prices Equilibria and Nonexclusive Insurance Market By Frédéric Loss; Gwenaël Piaser
  2. Women on French Corporate Board of Directors- How Do They Differ from their Male Counterparts? By Rey Dang; Anne-Françoise Bender; Marie-José Scotto
  3. Accrual and cash flow anomalies in diversified firms: Impact of segment portfolio management By Imen Khanchel El Mehdi
  4. Motivations of Public to Private transactions: An international empirical investigation By Aurélie Sannajust; Mohamed Arouri; Frédéric Teulon

  1. 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
  2. By: Rey Dang; Anne-Françoise Bender; Marie-José Scotto
    Abstract: Our research aims at exploring individual’s characteristics of women on Boards in the French context. In the first part of our paper, we discuss the different theoretical frameworks which supported the business case of gender diversity on Boards of Directors and expose our hypothesis regarding differences in women and men characteristics. The second part presents our methods, measurements and data. Then, we focus on our empirical study. Our sample consists of the French Index SBF 120 companies. We studied the profile of 1,250 directors collecting information from the firms’ annual reports of year 2010, using various scales defined by previous research on that field in the Anglo–Saxon literature. Our findings confirm that integrating women on boards has an impact on the Human and Social Capital of Boards but not as much as might have been expected. It is worth noting that men and women board members seem to build their human and social capital through the same educational process in France. Nonetheless, our work shows significant differences between men and women regarding professional experience and board member status.
    Keywords: Corporate Governance, Boards of Directors, Diversity, Gender, Board Composition
    Date: 2014–01–06
  3. By: Imen Khanchel El Mehdi
    Abstract: Our basic aim in this paper is to find out whether the returns of accrual and cash flow anomalies, in diversified firms, are sensitive to segment portfolio management. We further examine the persistence and the mispricing of abnormal accruals versus abnormal cash flows for diversified firms and whether SFAS N°131 reduced their market mispricing. Our results show that the persistence of abnormal accruals and abnormal cash flows decreases with the increase of the number of reported segments while the mispricing increases. SFAS N°131 reduced the market mispricing and did not entirely eliminate it. We also find that deciles of large abnormal accruals and large abnormal cash flows contain a higher frequency of firms having segments changes and that the magnitudes of the two components of earnings largely depend on changes in portfolio segments. Moreover, we find that the accrual and cash flow anomalies are largely related to segment portfolio management anomalies.
    Keywords: abnormal accruals, abnormal cash flows, abnormal returns, segment portfolio management,SFAS N°131
    Date: 2014–01–06
  4. By: Aurélie Sannajust; Mohamed Arouri; Frédéric Teulon
    Abstract: This article contributes to the financial literature by investigating the motivations of Public to Private transactions in an international perspective (Europe, USA and Asia). We consider seven main possible motivations: tax savings, incentive realignment, control, free cash-flow, growth of prospects, takeover defense and undervaluation. Our empirical findings suggest that low growth prospects, low liquidity and high free cash-flow are the three main motivations for a Public to Private transactions. However, regions show some particularities such as importance of family block-holders in Europe and importance of the level of taxation in Asia.
    Keywords: Public to private, Motivations, Logistic regression.
    JEL: G32 G34
    Date: 2014–02–12

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