1,720,960 research outputs found
Ownership structure and R&D: an empirical analysis of Italian listed companies
No full textThe objective of this study is to explore the relationship between Research and Development outlays (R&D) and firm ownership structure for public corporations listed on the Italian exchange. Using a sample of 369 firm-year observations over the period 2005-2013 and estimating with the Fixed-Effects model and then a dynamic panel data system-GMM estimator, we empirically investigate the relationship between R&D outlays and ownership structure, taking into consideration various indicator, such as ownership concentration, board ownership, and institutional investors. Our findings are of interest because they reveal a negative relationship between R&D outlays and ownership concentration. Furthermore, we find a positive relationship between R&D investments and institutional investors and a positive relationship between R&D outlays on the one hand and both firm size and firm age on the other hand. Moreover, we find a negative relationship between R&D outlays and the debt-to-capital ratio
Debt and ownership structure: evidence from Italy
No full textPurpose – The purpose of this study is to investigate the relationship between the debt and ownership
structure of a sample of Italian-listed companies to measure the role assumed in the control and
monitoring of agency costs.
Design/methodology/approach – This study examines a balanced panel data, using both a random
effects model and a generalized method of moments model to better capture any problems related to
the endogeneity of the variables in the model.
Findings – The results provide evidence of a positive relationship between debt and ownership
concentration on the one hand and a negative relationship between debt and institutional investors on
the other hand. The debt seems to assume both functions, i.e. the disciplinary role of substitute at low
levels of ownership concentration and a complementary role at high levels of ownership concentration.
Practical implications – This study provides three practical implications. The first is that the
complementarity between debt and ownership concentration provides evidence of the entrenchment
effect and tends to weaken the company financially. Second, the results also provide useful prompts to
policy-makers who should encourage the presence of institutional investors. Third, the policy-makers
should also encourage the expansion of the stock market to enhance the protection of shareholders,
reduce private control benefits and provide Italy the same opportunities as other common and civil law
countries to collect risk capital, avoiding the abuse of debt.
Originality/value – The empirical results suggest that ownership concentration increases the degree
of corporate debt, whereas institutional investors assume the disciplinary role of monitoring and
controlling agency costs. The results provide evidence of both the entrenchment effect and the
alignment-of-interests hypothesis and that the expropriation theory seems to prevail over the control and
monitoring role
Do shareholder coalitions affect agency costs? Evidence from Italian-listed companies
No full textThis study investigates the relationship between agency costs and ownership structure for a
sample of listed Italian companies to determine the impact of shareholder coalitions on agency
costs. Using a balanced panel dataset of 1956 firm-year observations for the period 2002–2013,
the results provide evidence that ownership concentration and debt play a limited role in
monitoring agency costs, whereas the type of shareholder plays an important role in either mitigating
or exacerbating agency costs. Family-controlled firms and coalitions among non-controlling
shareholders seem helpful in reducing agency costs. The results suggest that coalitions
among non-controlling shareholders both in family and non-family firms reduce agency costs.
The findings also indicate that multiple blockholders play a key role as mediators. The paper
provides a new perspective on assessing the role of agency costs in a bank-based, civil law
country. The results enable one to better understand the impact of blockholders on agency costs
and their interactions within family-controlled firms. The results also provide support for both
the entrenchment effect and the alignment-of-interests hypothesis
The impact of higher quality government regulation of business and greater economic freedom on living standards Evidence from OECD nations
No full textPurpose
– The purpose of this paper is to evaluate whether two specific forms of government policy influence entrepreneurship and hence the performance economy as a whole. Performance is measured in terms of living standards and growth therein. The policies are, as follows: higher quality government regulation of businesses and higher levels of economic freedom.
Design/methodology/approach
– The paper first provides a basic model focussing upon the regulation and economic freedom variables. The study then adds a dummy variable for G8 nations, a tax burden variable, and the long-term interest rate and provides six estimates. The empirical analysis involves pooled time-series/cross-section data for the OECD over the period 2003-2007.
Findings
– The findings indicate that for OECD nations, higher quality public regulation promotes entrepreneurial spirit and performance. Higher economic freedom does the same. The findings are that higher quality government regulation of business and higher levels of economic freedom lead to higher growth rates in the standard of living.
Originality/value
– The time period studied, i.e., just prior to the Great Recession, the context of the OECD, the adoption of pooled time-series/cross-section data, and the specific choice of variables in the analysis, along with the estimation of possibly unique or close to unique specifications involving the growth rate of living standards per se make this study different
Female representation in the boardroom and firm debt: empirical evidence from Italy
No full textUsing a panel dataset of non-financial public companies in Italy covering the
period 2005–2013, this paper provides an empirical analysis of the relationship between
female representation on corporate boards and corporate debt. The presence of
women in the boardroom might seem to push significantly on debt leverage and
suggest a complementary role in the control and monitoring of agency costs. However,
consistent with Kanter’s (Am J Sociol 82(5), 965–990, 1977) critical mass theory, that
at a level of tokenism women take on a complementary role and at greater levels, their
role either becomes a substitute for debt level, or plays a weaker complementary role in
debt level and in the monitoring of agency costs. The presence of women board
members who are linked to the family firm appears to significantly decrease the degree
of debt leverage. Furthermore, the presence of greater female representation in the
boardroom decreases the agency costs to the firm
Financial decisions and ownership structure as control mechanisms of agency problems: evidence from Italy
No full textPurpose
The purpose of this study is to investigate the relationship between financial decisions and ownership structure by using the control contests on a sample of Italian listed companies.
Design/methodology/approach
The analysis adopts a balanced panel data set of 984 firm-year observations for the period of 2002-2013, with estimation using a generalized method of moments.
Findings
The results appear to confirm both the hypotheses of the alignment of interests and the entrenchment effect. The entrenchment and alignment effects are not found to be alternatives but rather are found to co-exist. The presence of a coalition of minority shareholders acts as a tool to control agency costs, particularly when the coalition is instrumental in the contestability of corporate control.
Practical implications
These findings suggest that minority shareholders may have a larger impact than previously identified by strategically aligning with other shareholders to form coalitions. This study provides several practical implications. First, dividend payout is not necessarily a good instrument to control and monitor agency costs. This is because the payout can be used to expropriate benefits from the minority shareholders. Second, high ownership concentration does not always reduce agency costs. Third, a non-collusive coalition can be more useful in the monitoring of agency costs than other tools, such as the debt level.
Originality/value
This study shows that there is considerable value to the firm when individual blockholders come together in a contestable environment and become instrumental in making business decisions. The results support the contention that contestability is an excellent deterrent to dampen the expropriation of benefits to minority shareholders. This study also provides evidence that cash holding can be a good substitute for dividends and debt in the effort to limit agency costs
Financial market determinants of the real cost of funds to public corporations in the US: 2SLS and GMM findings
No full textPurpose – The purpose of this study is to provide new empirical evidence on the impact of a variety of
financial market forces on the ex post real cost of funds to corporations, namely, the ex post real interest
rate yield on AAA-rated long-term corporate bonds in the USA. The study is couched within an
open-economy loanable funds model, and it adopts annual data for the period 1973-2013, so that the
results are current while being applicable only for the post-Bretton Woods era. The auto-regressive
two-stage least squares (2SLS) and generalized method of moments (GMM) estimations reveal that the
ex post real interest rate yield on AAA-rated long-term corporate bonds in the USA was an increasing
function of the ex post real interest rate yields on six-month Treasury bills, seven-year Treasury notes,
high-grade municipal bonds and the Moody’s BAA-rated corporate bonds, while being a decreasing
function of the monetary base as a per cent of gross domestic product (GDP) and net financial capital
inflows as a per cent of GDP. Finally, additional estimates reveal that the higher the budget deficit as a
per cent of GDP, the higher the ex post real interest rate on AAA-rated long-term corporate bonds.
Design/methodology/approach – After developing an initial open-economy loanable funds model,
the empirical dimension of the study involves auto-regressive, two-stage least squares and GMM
estimates. The model is then expanded to include the federal budget deficit, and new AR/2SLS and
GMM estimates are provided.
Findings – The AR/2SLS and GMM (generalized method of moments) estimations reveal that the ex
post real interest rate yield on AAA-rated long-term corporate bonds in the USA was an increasing
function of the ex post real interest rate yields on six-month Treasury bills, seven-year Treasury notes,
high-grade municipal bonds and the Moody’s BAA-rated corporate bonds, while being a decreasing
function of the monetary base as a per cent of GDP and net financial capital inflows as a per cent of GDP.
Finally, additional estimates reveal that the higher the budget deficit as a per cent of GDP, the higher the
ex post real interest rate on AAA-rated long -term corporate bonds.
Originality/value – The author is unaware of a study that adopts this particular set of real interest rates
along with net capital inflows and the monetary base as a per cent of GDP and net capital inflows. Also, the
data run through 2013. There have been only studies of deficits and real interest rates in the past few years
Impact of federal budget deficits on the <i>ex ante</i> real interest rate yield on Moody’s Baa-rated long-term corporate bonds, 1960-2015
No full textPurpose
To investigate the impact of the federal budget deficit (expressed as a per cent of the Gross Domestic Product, GDP) in the US on the ex ante real interest rate yield on Moody’s Baa-rated corporate bonds and to provide evidence that is both contemporary and covers an extended time period, namely, 1960 through 2015.
Design/methodology/approach
The analysis constructs a loanable funds model that involves a variety of financial and economic variables, with the ex ante real interest rate yield on Moody’s Baa-rated long-term corporate bonds as the dependent variable. The dependent variable is contemporaneous with the federal budget deficit and two other interest rate measures. Accordingly, instrumental variables are identified for each of these contemporaneous explanatory variables. The model also consists of four additional (lagged) explanatory variables. The model is then estimated using auto-regressive, i.e., AR(1), two-stage least squares.
Findings
The principal finding is that the ex ante real interest rate yield on Moody’s Baa rated corporate bonds is an increasing function of the federal budget deficit, expressed as a per cent of GDP. In particular, if the federal budget deficit were to rise by one per centage point, say from 3 to 4 per cent of GDP, the ex ante real interest rate would rise by 58 basis points.
Research limitations/implications
There are other time-series techniques that could be applied to the topic, such as co-integration, although the AR(1) process is tailored for studying volatile series such as interest rates and stock prices.
Practical/implications
The greater the US federal budget deficit, the greater the real cost of funds to firms. Hence, the high budget deficits of recent years have led to the crowding out of investment in new plant, new equipment, and new technology. These impacts lower economic growth and restrict prosperity in the US over time. Federal budget deficits must be substantially reduced so as to protect the US economy.
Social/implications
Higher budget deficits act to reduce investment in ew plant, new equipment and new technology. This in turn reduces job growth and real GDP growth and compromises the health of the economy.
Originality/value
This is the first study to focus on the impact of the federal budget deficit on the ex ante real long term cost of funds to firms in decades. Nearly all related studies fail to focus on this variable. Since, in theory, this variable (represented by the ex ante real yield on Moody’s Baa rated long term corporate bonds) is a key factor in corporate investment decisions, the empirical findings have potentially very significant implications for US firms and for the economy as a whole in view of the extraordinarily high budget deficits of recent years.
</jats:sec
Going Beyond Counting First Authors in Author Co-citation Analysis
Full text linkThe present study examines one of the fundamental aspects of author co-citation analysis (ACA) - the way co-citation
counts are defined. Co-citation counting provides the data on which all subsequent statistical analyses and mappings
are based, and we compare ACA results based on two different types of co-citation counting - the traditional type that
only counts the first one among a cited work's authors on the one hand and a non-traditional type that takes into
account the first 5 authors of a cited work on the other hand. Results indicate that the picture produced through this non-traditional author co-citation counting contains more coherent author groups and is therefore considerably clearer. However, this picture represents fewer specialties in the research field being studied than that produced through the traditional first-author co-citation counting when the same number of top-ranked authors is selected and analyzed. Reasons for these effects are discussed
- …
