Ownership Structure Follows Managerial Strategy

Ownership Structure, Managerial Behavior and Corporate Value

The nonlinear relationship between corporate value (Tobin's Q) and managerial ownership is well documented. This has commonly been attributed to the onset of managerial entrenchment, which results in a decrease of corporate value for increasing levels of managerial holdings. We propose a more complex structure for the corporate value { managerial ownership function, which accounts for the e®ect...

Ownership Structure , Managerial Incentives , and the Intensity of Rivalry

This study investigates how ownership forms affect managerial incentives and pricing in different competitive contexts. We explore how the difference in ownership form between franchised and company-owned units influences the incentives of the managers who take the day-to-day decisions that constitute interfirm rivalry. We argue that chains with company-owned units may restrict decision-making ...

Managerial Hedging and Equity Ownership

Managerial Hedging and Equity Ownership Risk-averse managers can hedge the aggregate component of their exposure to firm’s cash flow risk by trading in financial markets, but cannot hedge their firm-specific exposure. This gives them incentives to pass up firm-specific projects in favor of standard projects that contain greater aggregate risk. Such risk substitution gives rise to excessive aggr...

Managerial ownership dynamics and firm value

From 1988 to 2003, the average change in managerial ownership is significantly negative every year for American firms. We find that managers are more likely to significantly decrease their ownership when their firms are performing well, but not more likely to increase their ownership when their firms have poor performance. Because investors learn about the total change in managerial ownership w...

Ownership Transition, Managerial Short-termism, and Exploratory versus Exploitative Innovation Strategy