226 research outputs found
A remark on a paper by Alessandrini and Vessella
No full textWe prove that the Lipschitz constant of the Lipschitz stability result for the inverse conductivity problem proved by G. Alessandrini and S. Vessella behaves exponentially with respect to the number N of regions considered
CORPORATE GOVERNANCE AND CAPITAL ACCUMULATION: FIRM-LEVEL EVIDENCE FROM ITALY
No full textThis study investigates the impact of investor protection on firm ownership and capital growth in a model where investor protection is allowed to vary between firms. Using panel data for Italy, we construct firm level variables to capture the degree of investor protection, which is observable to all shareholders. Empirical evidence indicates that the stronger the investor protection the lower the fraction of equity that is owned by insiders. Results show that higher insider equity ownership is linked to larger risk premiums and higher costs of capital. Implications suggest that the magnitude of capital stock distortions is particularly important when shareholder protection is weak and ownership concentration is hig
Agency Issues in a Family Controlled corporate governance—The case of Italy
No full textThis study provides empirical evidence on the relationship between
dividend payout ratios, executive compensation and agency costs in Italy. Corporate
governance in Italy is distinguished by the fact that a large number of Italian firms are
family controlled, which may theoretically reduce asymmetry of information and
associated agency costs. Using a panel of listed manufacturing firms we find evidence
that family control plays a significant role in resolving agency issues, i.e. that increases
in family control of the firm lead to a higher dividend payout. Nevertheless, as we also
find that managerial compensations are negatively related to dividend payout ratios,
even in this family controlled environment, dividends do play their role in mitigating
agency problem
Diversification
No full textDeterminants of industrial concentration, market integration and efficiency in the European Union. An analysis of trends in key market characteristics across industries and firms: firm diversification
Access Regulation, Financial Structure and Investment in Vertically Integrated Utilities: Evidence from EU Telecoms
No full textWe examine theoretically and empirically the relationship between access regulation, financial structure and investment decisions in network industries, analyzing if financial variables can be used as a strategic device to influence the regulator’s price setting decisions. Using a panel of 15 EU Public Telecommunication Operators (PTOs) over the period 1994-2005, we first investigate the determinants of regulated prices (both wholesale and retail), firm financial structure and investment, and then test the relationship between leverage, regulated charges and firm’s investment. However, our model suggests that if leverage influences the regulated access charges, then it will also impact competition in the downstream segment. Therefore, we also investigate the impact of the PTO’s leverage on market competition. Our results show that leverage positively affects regulated rates, as well as the PTOs’ investment rate, as predicted by Spiegel and Spulber (1994). Moreover, higher leverage also leads to higher access charges and an increase in leverage is followed by a decrease in the number of competitors and by an increase of the incumbent’s market share. This suggests that the strategic use of debt to discipline the regulator’s lack of commitment within a vertically integrated network industry may somewhat impair or delay competition in the retail segment, but has a favorable counterpart in mitigating the underinvestment problem.
Falling from grace: Family-based brands amidst scandals
No full textFamily firms often adopt brand strategies based on their family status to convey messages of ethics and integrity to their external stakeholders. Research has highlighted the positive influence that family-based brands exert on corporate reputation and related organizational outcomes, yet they may become a liability in circumstances of scandals. In this study, we disentangle the complex landscape of scandals in family firms by conceptually developing a typology corroborated with illustrative cases. Moreover, we explore the consequential effects of scandals on family-based brands and possible redressive strategies implemented in the aftermath of scandals outbreaks. While previous work has mainly seen family-based branding as an edge, our study examines its drawbacks under circumstances of scandals and offers a springboard to further develop this line of inquiry
Italian Corporate Governance, Investment, and Finance
No full textItalian industrial structure and financial markets have several distinct features. Italian firms are relatively small, few trade publicly and no corporate bond market exists. The limited types of external funds available to Italian firms makes them prone to financing constraints. We examine a panel containing over 1100 Italian firms. We find that firm size does not appear correlated with the severity of financing constraints. We also find that small firms are frequently mature. Our results suggest that young firms face financing constraints, while mature firms may develop relationships with lenders that lower the costs of external funds. Small, young firms appear to face the tightest financing constraints. Many firms are affiliated with pyramidal business groups. We find that affiliation with pyramidal business groups appears to reduce the effect of financing constraints. Our results have important implications for government policy to promote small firm growth in Italy.
Stable determination of sound-hard polyhedral scatterers by a minimal number of scattering measurements
No full textThe aim of the paper is to establish optimal stability estimates for the determination of sound-hard polyhedral scatterers by a minimal number of far-field measurements. This work is a significant and highly nontrivial extension of the stability estimates for the determination of sound-soft polyhedral scatterers by far-field measurements, proved by one of the authors, to the much more challenging sound-hard case.
The admissible polyhedral scatterers satisfy minimal apriori assumptions of Lipschitz type and may include at the same time solid obstacles and screen-type components. In this case we obtain a stability estimate with N far-field measurements, N being the space dimension. Important features of such an estimate are that we have an explicit dependence on the parameter h representing the minimal size of the cells forming the boundaries of the admissible polyhedral scatterers, and that the modulus of continuity, provided the error is small enough with respect to h, does not depend on h. If we restrict to N=2,3 and to polyhedral obstacles, that is to polyhedra, then we obtain stability estimates with fewer measurements, namely first with N-1 measurements and then with a single measurement. In this case the dependence on h is not explicit anymore and the modulus of continuity depends on h as well
INVESTMENT, CASH FLOW AND MANAGERIAL DISCRETION IN STATE-OWNED FIRMS-Evidence across soft and hard budget constraints
No full textIn this paper we extend to state-owned enterprises the empirical work on investment-cash flow sensitivities. Our sample is a panel of Italian state-owned manufacturing firms over the period 1977-1993. The distinctive element of public firms’ financial environment is the budget regime under which they operate. Our analysis of Italian institutions identifies a switch from a soft to a hard budget constraint regime in 1987, for which a critical determinant was Italy’s attempt to qualify for EMU. We estimate a number of models of investment with additional cash flow terms and test for parameter constancy across budget regimes and the business cycle. We find that there is a positive correlation between investment and cash flow also for public firms, but only when the budget regime is soft. We argue that excessive managerial discretion is likely to be responsible for this correlation. We also find that the switch to a hard regime brings about an important change in the investment decisions of this panel of public enterprises.
Independence, Investment and Political Interference: Evidence from the European Union
No full textThis paper examines the implications of “modern” regulatory governance - i.e. the inception of Independent Regulatory Authorities (IRAs) - for the investment decisions of a large sample of EU publicly traded regulated firms from 1994 to 2004. These firms provide massively consumed services, and this is why governments are highly sensitive to regulatory decisions and outcomes. We therefore analyse and empirically investigate if: i) the inception of IRAs reduces the time-inconsistency problems that lead regulated firms to underinvest, and ii) governments’ political orientation and residual state ownership interfere with investment decisions. To control for potential endogeneity of the key institutional variables, we draw our identification strategy from the political economy literature. Our results show that regulatory independence has a positive impact on regulated firms’ investment while private vs. state ownership is not significant. We also find that, under executives at the extreme of the political spectrum, government interference in the functioning of the IRA is likely to re-introduce instability and uncertainty in the regulatory framework, thus undermining investment incentives.Institutions; Firm Investment; Private and State ownership; regulatory independence; government's political orientation
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