Corporate Ownership and Control

Journal Information
ISSN / EISSN : 1727-9232 / 1810-0368
Published by: Virtus Interpress (10.22495)
Total articles ≅ 2,690
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Massimo Cecchi
Corporate Ownership and Control, Volume 18, pp 90-101; doi:10.22495/cocv18i4art7

Abstract:
Although Italy is characterized by a Rhine model of capitalism, with an underdeveloped stock exchange, previous studies on gender inequality have focused only on the analysis of the country’s few listed companies. Our study examines, instead, a larger sample of approximately 15,000 Italian limited companies, which include, in particular, unlisted companies. In the absence of estimates of these firms’ value on a stock market, the study measures performance based on financial statement data and ratios. No statistically significant correlations between performance and gender emerge. Therefore, if women have to “be better” to be treated “equally”, we can conclude that women do not seem to perform better than their male counterparts. However, women are not found to perform worse, either. Hence, we can also conclude that their underrepresentation can only be the result of sociocultural discrimination. We believe that this reversal of perspective should also be considered in future studies in search of overperformance to justify leading roles for women
, , Gianluca Antonucci, Michelina Venditti
Corporate Ownership and Control, Volume 18, pp 77-89; doi:10.22495/cocv18i4art6

Abstract:
We intend to investigate the impact of chief executive officers’ (CEO) powers on corporate decisions made by firms in the context of board oversight (BO) and market competition (MC). From 2007 to 2017, we applied a quantitative approach to a sample of two stressed European markets (i.e., Hungary and Greece). We found that CEO power has a negative impact on corporate risk and firm performance. Furthermore, results also reveal no sign of moderation effect for MC with corporate decisions, whereas BO moderated the CEO power and corporate decisions in the Hungarian market. However, the results of moderation for the Greek market are diametrically opposed to those of the Hungarian market. Our study indicates that in stressed markets, the CEO power is suppressed and does not increase the corporate risk and firm performance despite the good governance and high market competition. The study can help boards in the optimal delivery of power to the CEO to perform well in a stressed environment
Isha Gupta, T. V. Raman, Naliniprava Tripathy
Corporate Ownership and Control, Volume 18, pp 67-76; doi:10.22495/cocv18i4art5

Abstract:
The main objective of this paper is to examine the impact of related/unrelated merger and acquisition (M&A) on value creation and research and development (R&D) of Indian non-financial sector companies. This study focuses on whether related M&A outperforms unrelated M&A in the context of value creation and R&D. The sample of the study includes 64 companies to evaluate the significance of relatedness and unrelatedness between target and acquiring companies of the Indian non-financial sector using panel data from the period from 2015 to 2020. The study employs a logistic regression model, which is a predictive model employed wherein the response variable is categorical. The idea of logistic regression is to establish a relationship between variables and the probability of a given outcome. The results of our outcome reveal that partner familiarity affects the post-acquisition value creation and R&D. Further, the findings of the study acclaim that related M&A outperform unrelated M&A. The study indicates that related M&A create positive value but influence negatively to R&D. The findings of the study have several implications for the managers and policymakers who need to understand the dynamics of related/unrelated mergers to take a valid judgment before making merger and acquisition decisions
Thien Le
Corporate Ownership and Control, Volume 18, pp 42-66; doi:10.22495/cocv18i4art4

Abstract:
This study examines the relation between firm pair’s sharing of a top institutional investor (i.e., an institutional investor with the largest shareholding) and accounting comparability. Using data from Compustat, CRSP, and Thompson Reuters over the 1993–2017 period, the study finds that firm pairs that share the top institutional investor exhibit higher accounting comparability than other firm pairs. In addition, firm pairs whose top institutional investors are monitoring institutions (regardless of whether they are the same institutions) exhibit greater comparability than other firm pairs whose top institutional investors are non-monitoring institutions. Collectively, the study contributes to existing research on accounting comparability and large institutional investors by showing that the sharing of top institutional investors is an important determinant of accounting comparability
Sunny Oswal, Kushagra Goel
Corporate Ownership and Control, Volume 18, pp 30-41; doi:10.22495/cocv18i4art3

Abstract:
This paper studies the concept of equity returns and sees whether there is a significant difference between the expected return which is calculated through the capital asset pricing model (CAPM) and the actual return given by the stock. For this study, 10 stocks with maximum market capitalization are taken focusing on 12 countries for our research subdivided into developed and developing countries. The period of study is 10 calendar years from 2010 to 2019. The hypothesis being whether the actual stock returns are significantly different from the expected stock return, for the same paired t-test has been deployed on 120 stocks to check the significance. Further evaluation has been done to check whether the expected return is undervalued or overvalued in reference to the actual return. To check whether there is a significant difference between the actual and expected return across the companies, panel regression was used, and then the same was done to check whether there is a significant difference between countries and also whether there is a significant difference on the basis whether the countries are developed or developing. The authors have existing research confined to particular geographies that discuss VAR models
Patrick Ulrich,
Corporate Ownership and Control, Volume 18, pp 21-29; doi:10.22495/cocv18i4art2

Abstract:
In the international literature, there exists a lively discussion about the fundamentals of different executive compensation models. Executive compensation is relevant not only from the point of view of corporate management but also from the point of view of corporate governance and here potential information asymmetries and corporate misconduct. Internal or external metrics, in particular, are used as the basis for compensation. In family businesses, which per se are less likely to offer variable compensation to their executives, it is assumed that internal rather than external metrics are more likely to be used as the basis for compensation. This paper tests this thesis on the basis of an empirical survey of 113 German companies. The empirical study shows clear differences in the use of internal and external metrics as a basis for executive compensation — a fact that has so far not been addressed in other empirical studies.
Abdlmutaleb Boshanna
Corporate Ownership and Control, Volume 18, pp 8-20; doi:10.22495/cocv18i4art1

Abstract:
This study conducts a systematic review and provides a comprehensive up-to-date review of the literature about diversity on corporate boards. Unlike previous studies, we do not restrict our search to a specific type of diversity (e.g., gender diversity) or limited firm outcomes (e.g., firm performance). Our aim is to review, evaluate, synthesize, and summarize the literature and extend our knowledge on five key areas: 1) the theoretical approach (going beyond the theoretical analysis of each article by exploring how the theoretical perspective informs their focus); 2) dominant framing and theorizing (single theory vs multi-theories); 3) determinants and consequences; 4) how board diversity is defined and operationalized; and 5) the outcomes of board diversity. In reviewing the research from 2010 to February 2021 and using Saint Mary’s University Business Source Premier (SMU EBSCO) database, we identify 46 articles. Our findings reveal that agency theory no longer dominates board diversity research and has given way to institutional theory. The increasing use of institutional theory, which considers the effect of social structure on organizational outcomes, may be caused by most of the literature (based on our findings) using cross-country data. At the same time, there is a tendency to use a more multi-theoretical approach rather than a single theory one, and there are methodological limitations, including a paucity of rich data collection methods (e.g., surveys, questionnaires, and interviews). In addition, the current literature, according to the findings, focuses more on the consequences than the determinants of board diversity. Finally, our study intends to highlight and outline crucial research gaps that invite future investigation
Corporate Ownership and Control, Volume 18, pp 220-222; doi:10.22495/cocv18i3sieditorial

Abstract:
To date, future research trends will certainly concern sustainability and entrepreneurship due to the post-COVID-19 crisis. Studies will focus on the determinants related to corporate governance, such as corporate ownership, or the role of institutional investors, or a company that aims to get public by an IPO as a possible answer to the crisis. A future research trend will surely concern environmental and economic sustainability. Another line of research will concern the protection of biodiversity and gender equality. With the regard to the content of this issue of the Corporate Ownership and Control journal, ownership structure is the most popular issue considered by the authors of the papers.
Sam Kolahgar, Azadeh Babaghaderi, Harjeet S. Bhabra
Corporate Ownership and Control, Volume 18, pp 438-468; doi:10.22495/cocv18i3siart16

Abstract:
Corporate communication efforts have mainly been viewed as a by-product of governmental regulations and board of directors’ oversight. In this paper, we examine the role of corporate communication as a stand-alone governance mechanism. We introduce a new business-related dictionary and conduct automated textual analysis of over 150,000 electronic documents filed by a sample of firms listed on the S&P/TSX Composite Index from 1999 to the end of 2014. Our findings demonstrate the governing role of corporate communication by documenting the adverse market effects of deviations from the expected level of communication. Moreover, as a governance mechanism, corporate communication shows substitution/complementary relationships with other established governance mechanisms. In addition, we find a non-linear relationship between a firm’s communication efforts and its value and risk levels. Results are robust after controlling for major corporate events (M&A, spin-offs, financial distress and bankruptcy, and significant lawsuits). These findings contribute to corporate governance literature and the understanding of agency theory predictions of communications and disclosures’ economic effects
Hugh Grove, Maclyn Clouse
Corporate Ownership and Control, Volume 18, pp 423-437; doi:10.22495/cocv18i3siart15

Abstract:
Since many companies are making renewable energy commitments, boards of directors have responsibilities to monitor such commitments for enhanced corporate governance. This paper develops such board corporate social responsibilities for renewable energy commitments, especially in response to activist investors. In the existing literature, there are no research papers that addressed the major research question, and corresponding relevance, of this paper. What are the boards of directors’ responsibilities for monitoring their companies’ commitments to renewable energy and are they making significant efforts, or just greenwashing, i.e., just making commitments or pledges without any substantial subsequent performance? The shifting energy landscape to renewables, especially for carbon-free electricity, and the affordability and reliability of renewables are developed. Global corporations committed to 100% renewable electricity are cited for boards to monitor. Following guidelines from activist investors, boards of directors can assess whether their companies are reporting in alignment with the Task Force on Climate-related Financial Disclosures or other reporting systems. Boards can monitor how their companies’ business plans are compatible with transitioning to a net-zero economy and how such plans are incorporated into long-term strategies. They can monitor if sustainability connections to stakeholders are driving long-term durable profits and delivering value to shareholders, customers, employees, and communities. Future research could investigate these board responsibilities with case studies or empirical studies, especially to see if greenwashing exists
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