Modelling the objective function of managers in the presence of overlapping shareholding

Detalhes bibliográficos
Autor(a) principal: Brito, Duarte
Data de Publicação: 2023
Outros Autores: Elhauge, Einer, Ribeiro, Ricardo, Vasconcelos, Helder
Tipo de documento: Artigo
Idioma: eng
Título da fonte: Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos)
Texto Completo: http://hdl.handle.net/10362/151536
Resumo: We would like to thank the Editor, José L. Moraga, and three anonymous referees for their thorough and thoughtful reports. We would also like to thank Ricardo Gonçalves, Fiona Kasperk, Torsten Persson, Michele Polo, Giacomo Ponzetto, Vasco Rodrigues, Martin Schmalz, Guido Tabellini, Kyle Wilson and Alminas Žaldokas, as well as seminar and conference participants at EARIE, IIOC, PEJ and Universidade Católica Portuguesa for helpful comments and suggestions. We want to especially thank Amir Amel-Zadeh, Fiona Kasperk, and Martin Schmalz for sharing the data with us. Einer Elhauge gratefully acknowledges financial support from Harvard Law School. All remaining errors are of course our own. Publisher Copyright: © 2022
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spelling Modelling the objective function of managers in the presence of overlapping shareholdingBanzhaf controlManager objective functionOverlapping shareholdingOwnership dispersionProportional controlIndustrial relationsAerospace EngineeringEconomics and EconometricsEconomics, Econometrics and Finance (miscellaneous)Strategy and ManagementIndustrial and Manufacturing EngineeringWe would like to thank the Editor, José L. Moraga, and three anonymous referees for their thorough and thoughtful reports. We would also like to thank Ricardo Gonçalves, Fiona Kasperk, Torsten Persson, Michele Polo, Giacomo Ponzetto, Vasco Rodrigues, Martin Schmalz, Guido Tabellini, Kyle Wilson and Alminas Žaldokas, as well as seminar and conference participants at EARIE, IIOC, PEJ and Universidade Católica Portuguesa for helpful comments and suggestions. We want to especially thank Amir Amel-Zadeh, Fiona Kasperk, and Martin Schmalz for sharing the data with us. Einer Elhauge gratefully acknowledges financial support from Harvard Law School. All remaining errors are of course our own. Publisher Copyright: © 2022The objective function of managers in the presence of overlapping shareholding may differ from the traditional own-firm profit maximization, as they may internalize the externalities their strategies impose on other firms. The dominant formulation of the objective function in such cases has, however, been criticised for yielding counter-intuitive profit weights when the ownership of non-overlapping shareholders is highly dispersed. In this paper, we examine this issue. First, we make use of a probabilistic voting model (in which shareholders vote to elect the manager) to microfound an alternative formulation of the objective function of managers, which solves the above-mentioned criticism. Second, we apply the two formulations to the set of S&P 500 firms. We show that ownership dispersion of non-overlapping shareholders is, in fact, a relevant empirical issue, which may induce an over-quantification of the profit weights computed from the dominant formulation, particularly under a proportional control assumption.DCSA - Departamento de Ciências Sociais AplicadasRUNBrito, DuarteElhauge, EinerRibeiro, RicardoVasconcelos, Helder2023-04-03T22:13:47Z2023-032023-03-01T00:00:00Zinfo:eu-repo/semantics/publishedVersioninfo:eu-repo/semantics/article25application/pdfhttp://hdl.handle.net/10362/151536eng0167-7187PURE: 51754039https://doi.org/10.1016/j.ijindorg.2022.102905info:eu-repo/semantics/openAccessreponame:Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos)instname:Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informaçãoinstacron:RCAAP2024-03-11T05:33:57Zoai:run.unl.pt:10362/151536Portal AgregadorONGhttps://www.rcaap.pt/oai/openaireopendoar:71602024-03-20T03:54:37.301098Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) - Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informaçãofalse
dc.title.none.fl_str_mv Modelling the objective function of managers in the presence of overlapping shareholding
title Modelling the objective function of managers in the presence of overlapping shareholding
spellingShingle Modelling the objective function of managers in the presence of overlapping shareholding
Brito, Duarte
Banzhaf control
Manager objective function
Overlapping shareholding
Ownership dispersion
Proportional control
Industrial relations
Aerospace Engineering
Economics and Econometrics
Economics, Econometrics and Finance (miscellaneous)
Strategy and Management
Industrial and Manufacturing Engineering
title_short Modelling the objective function of managers in the presence of overlapping shareholding
title_full Modelling the objective function of managers in the presence of overlapping shareholding
title_fullStr Modelling the objective function of managers in the presence of overlapping shareholding
title_full_unstemmed Modelling the objective function of managers in the presence of overlapping shareholding
title_sort Modelling the objective function of managers in the presence of overlapping shareholding
author Brito, Duarte
author_facet Brito, Duarte
Elhauge, Einer
Ribeiro, Ricardo
Vasconcelos, Helder
author_role author
author2 Elhauge, Einer
Ribeiro, Ricardo
Vasconcelos, Helder
author2_role author
author
author
dc.contributor.none.fl_str_mv DCSA - Departamento de Ciências Sociais Aplicadas
RUN
dc.contributor.author.fl_str_mv Brito, Duarte
Elhauge, Einer
Ribeiro, Ricardo
Vasconcelos, Helder
dc.subject.por.fl_str_mv Banzhaf control
Manager objective function
Overlapping shareholding
Ownership dispersion
Proportional control
Industrial relations
Aerospace Engineering
Economics and Econometrics
Economics, Econometrics and Finance (miscellaneous)
Strategy and Management
Industrial and Manufacturing Engineering
topic Banzhaf control
Manager objective function
Overlapping shareholding
Ownership dispersion
Proportional control
Industrial relations
Aerospace Engineering
Economics and Econometrics
Economics, Econometrics and Finance (miscellaneous)
Strategy and Management
Industrial and Manufacturing Engineering
description We would like to thank the Editor, José L. Moraga, and three anonymous referees for their thorough and thoughtful reports. We would also like to thank Ricardo Gonçalves, Fiona Kasperk, Torsten Persson, Michele Polo, Giacomo Ponzetto, Vasco Rodrigues, Martin Schmalz, Guido Tabellini, Kyle Wilson and Alminas Žaldokas, as well as seminar and conference participants at EARIE, IIOC, PEJ and Universidade Católica Portuguesa for helpful comments and suggestions. We want to especially thank Amir Amel-Zadeh, Fiona Kasperk, and Martin Schmalz for sharing the data with us. Einer Elhauge gratefully acknowledges financial support from Harvard Law School. All remaining errors are of course our own. Publisher Copyright: © 2022
publishDate 2023
dc.date.none.fl_str_mv 2023-04-03T22:13:47Z
2023-03
2023-03-01T00:00:00Z
dc.type.status.fl_str_mv info:eu-repo/semantics/publishedVersion
dc.type.driver.fl_str_mv info:eu-repo/semantics/article
format article
status_str publishedVersion
dc.identifier.uri.fl_str_mv http://hdl.handle.net/10362/151536
url http://hdl.handle.net/10362/151536
dc.language.iso.fl_str_mv eng
language eng
dc.relation.none.fl_str_mv 0167-7187
PURE: 51754039
https://doi.org/10.1016/j.ijindorg.2022.102905
dc.rights.driver.fl_str_mv info:eu-repo/semantics/openAccess
eu_rights_str_mv openAccess
dc.format.none.fl_str_mv 25
application/pdf
dc.source.none.fl_str_mv reponame:Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos)
instname:Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informação
instacron:RCAAP
instname_str Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informação
instacron_str RCAAP
institution RCAAP
reponame_str Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos)
collection Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos)
repository.name.fl_str_mv Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) - Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informação
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