CEO ownership, corporate control, and bank performance

This study examines the relation between CEO ownership and bank performance. In contrast to Pi and Timme (1993), we find that, when economic measures of performance are used, the relation between ownership and the performance of commerical banks is nonlinear. Additionally, in contrast to previous studies, we find the question of whether or not the CEO also holds the title of chairman of the board has an insignificant impact on bank performance. We conclude that, in commercial banks, management entrenchment may offset the effects predicted by Jensen and Meckling's (1976) convergence-of-interest hypothesis.     

CEO retention,firm performance and corporate governance

This paper seeks to determine if CEO turnover is a function of firm performance, and therefore attempts to gauge the extent to which CEO interests are aligned with those of stockholders. The methodology in this paper focuses primarily on estimating the relationship between the probability of CEO exit and indices of firm performance and corporate governance structure. A major finding of the paper is that the accountability of CEOs to stockholders is significantly limited by CEO power, and CEO turnover is influenced more by internal governance structure than by firm profit or sales performance.     

Impact of CEO narcissism and hubris on corporate sustainability and firm performance

To explore the personality traits and corporate strategy of chief executive officers (CEOs), this study investigates how narcissistic and hubristic tendencies in CEOs affect the relationship between corporate sustainability practices (CSP) and firm performance. The primary purpose is to examine whether CEO narcissism and hubris can moderate the effect of corporate sustainability on firm performance. We investigate the influence of corporate sustainability on firm performance in three dimensions: economic, environmental, and social. The relationship between the mechanisms of supervision and agency theory is explored to assist investors in decision making. The results of this study show that compared to narcissistic CEOs, hubristic CEOs will further enhance the positive influence of CSP on corporate performance, especially in the environmental and social dimensions. This research strengthens the literature on CEO narcissism and hubris by demonstrating that CEO personality traits influence the relationship between corporate sustainability practices and firm performance.     

Hostile–vs.–white‐knight bidders

We examine the hypothesis that white knights enter control contests to spend free cash flow instead of paying it out to shareholders. Tobin's q is used to measure management's inclination to invest in negative NPV investments. We find that historically, white knights have over‐invested and their acquisition of the target is one more negative NPV investment. Alternatively, hostile bidders’ past investment decisions have increased shareholder wealth. Furthermore, white knights’ returns upon the announcement of their bid have a significant negative relationship with free cash flow, implying that their bid reveals information about white knights management's investment decisions. Copyright © 1999 John Wiley & Sons, Ltd.     

Behavioral agency and corporate entrepreneurship: CEO equity incentives & competitive behavior

Scholars have long studied drivers of entrepreneurial behavior among established firms. Yet little is known about how individual factors shape a firm’s choice to pursue entrepreneurship. We draw on behavioral agency theory to explore the role of equity incentives in driving corporate entrepreneurship. Our findings suggest CEOs avoid corporate entrepreneurial behaviors as their option wealth increases. However industry dynamics also prove to be an important contingency when predicting the effects of both restricted stock and stock options on the likelihood that the CEO engages in corporate entrepreneurship. Our findings provide a theoretical platform for predicting dimensions of entrepreneurial behavior and highlight effects of CEO equity ownership.

     

Agency,corporate control and accounting methods–the lifo-fifo choice

The study examines the effect of the firm's ownership structure on its management's choice of LIFO or FIFO inventory valuation methods. Managers of widely held firms are found to select the accounting method that furthers their own interests, thus causing the firms' owners to bear agency costs that appear to be substantial.     

Twin Data vs. Longitudinal Data to Control for Unobserved Variables in Earnings Functions – Which Are the Differences?*

This paper compares two different approaches empirically to control for unobserved characteristics when estimating the effect of marriage on male and female earnings: the longitudinal and the twins approach. The estimates were obtained by exploiting the longitudinal dimension of a large sample of Swedish twins, so that longitudinal and twin‐based estimates could be obtained in the same sample. The two approaches lead to different conclusions both regarding the role of unobserved characteristics in the cross‐sectional earnings–marriage relationship and the effect of marriage on earnings. The paper investigates three potential explanations of this difference.     

Transfer Payments without Growth: Evidence for German Regions, 1992–2005

After German reunification, interregional subsidies accounted for approximately 4% of gross fixed capital investment in the new federal states (i.e. those which were formerly part of the German Democratic Republic). We show that, between 1992 and 2005, infrastructure and corporate investment subsidies had a negative net impact on regional economic growth and convergence. This result is robust to both the specification of spatially weighted control variables and the use of instrumental variable techniques to control for the endogeneity of subsidies. Our results suggest that regional redistribution was ineffective, potentially due to a lack of spatial concentration to create growth poles.     

Workplace industrial relations in Britain, 1980–2004

The Workplace Industrial Relations Surveys marked a radical departure in the study of industrial relations (IR) by ‘mapping’ IR in Britain with nationally representative large‐scale surveys of workplace managers, thus permitting investigation of the incidence of practices and changes over time. This article reflects on some of what we have learned in the five surveys over the quarter century since 1980, focusing selectively on the demise of collective IR, pay determination, the IR climate, and union effects on wages and employment growth.     

Earnings quality and corporate payout policy linkages: An Indian context

We investigate the role of accounting quality as an antecedent of dividend payout decision of firms, for both dividend levels and dividend event, in an emerging market context. Using the data for Indian firms through the years 2006–2016, we evaluate the impact of discretionary accruals on payout decision employing Tobit and Logit regression models amid set of idiosyncratic controls. We report that better earnings quality, on average, is associated with large dividend payments for Indian firms. Moreover, the likelihood of dividend payment reduces with poor earnings quality and more so when earnings manipulation is done to increase earnings. Nonetheless, we show that higher earnings quality reduces dividends during the crisis period and also for group-affiliated firms. However, the same doesn’t hold true for dividend likelihood. The relationship is robust to the idiosyncratic controls and the causality test confirms that results are not susceptible to endogeneity issue. Overall, we conclude that better earnings quality takes care of free cash flow problems and alleviates the agency and information asymmetry related costs, thereby stimulating payout policy.     

Human resource management control system and firm performance: a contingency model of corporate control

This study explores how corporate controls used by the parent company of a conglomerate affect subsidiaries' human resource management (HRM) control–performance relationship. Empirical results from 93 firms reveal that the appropriate use of HRM control systems was a contributing factor to firm performance. When a subsidiary's approach to HRM was based on behavior control, performance was lower when the parent company emphasized financial control. When a subsidiary's approach to HRM was based on output control, performance was higher when the parent company emphasized either strategic or financial control. When a subsidiary's approach to HRM was based on input control, performance was higher when the parent company emphasized strategic control.     

CEO compensation, shareholder rights, and corporate governance: An empirical investigation

We investigate whether CEO compensation is influenced by the strength of shareholder rights. Our evidence reveals that CEOs of firms where shareholder rights are weak obtain more favorable compensation. It is also found that higher CEO pay is associated with a higher degree of potential managerial entrenchment. Additionally, CEOs of firms with governance provisions that offer them protection from takeovers enjoy more generous pay. We also examine the change in CEO compensation relative to the change in shareholders' wealth. The evidence shows that when there is an increase in shareholders' wealth, the CEO is able to obtain higher incremental compensation when shareholder rights are weak. On the contrary, when shareholders' wealth falls, there is no corresponding decline in CEO compensation when shareholder rights are weak. Given the empirical evidence, we argue that CEO compensation practices reflect rent expropriation rather than optimal contracting.     

Employees' entrepreneurial contributions to firms in Russia, 1995–2004

This article examines how employee self‐reported entrepreneurial contributions evolved in firms operating in Russia in 1995–2004 and whether changes can be explained by Akerlof's theory of implicit gift exchange in labour contracts. We find that these contributions were indeed influenced by wage premia and shifting work norms, declining by about a half during the period and with a particularly marked fall in contributions by manual workers. The trend was found among foreign‐owned, private Russian‐owned and state‐owned companies. Akerlof's model therefore helps explain Russian workers' changing behaviour.     

The changing job skills of female part‐time workers in Britain 1992–2006

The work situation of female part‐time workers has been a central focus of diverse interpretations of labour market disadvantage. While providing rather different accounts of why this should be the case, these share a view that part‐timers are largely confined to jobs with lower levels of skill than full‐timers. This article, drawing on nationally representative surveys, shows that the skill requirements of female part‐time jobs have improved significantly since the early 1990s relative to male full‐timers. While some sectors of part‐time work have benefited more than others, there is evidence of polarisation only with respect to part‐timers with different working hours. The overall rise in the relative skills of part‐timers poses significant issues about employer practice with respect to the wider involvement of part‐timers in the organisations for which they work.     

Transaction cost economics and corporate governance: the case of CEO age and financial stake

Agency theory provides a valuable lens for understanding the role and importance of many varied governance mechanisms. We argue that transaction cost economics (TCE) provides a complementary theoretical lens for studying corporate governance because it illuminates the various contingencies that moderate the importance of alternative governance mechanisms. Using agency theory, we argue and find evidence that the confluence of advancing CEO age and large CEO stock holdings will cause the CEO to become overly risk‐averse. Moreover, we use TCE to more fully explicate the ensuing performance consequences as well as the contextual factors that critically moderate this relationship. Copyright © 2010 John Wiley & Sons, Ltd.