Dual class shares, board of directors’ effectiveness and firm’s market value: an empirical study
Autor(a) principal: | |
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Data de Publicação: | 2017 |
Outros Autores: | , |
Tipo de documento: | Artigo |
Idioma: | eng |
Título da fonte: | Repositório Institucional da UFMG |
Texto Completo: | http://hdl.handle.net/1843/50505 |
Resumo: | This study aims to identify whether a relationship exists between the controlling shareholders’ voting power and outside directors’ effectiveness in maximizing firms’ financial performance. We analyze a panel data with 3057 observations for the 2000–2012 period using a random effects model, logit and probit regressions, and the two-stage model of Heckman in the Brazilian stock market. Our findings show that firms whose controlling shareholders use dual class shares to leverage their voting power have less independence from the board and worse financial performance and market value. Further, the percentage of outside directors tends to be ineffective in increasing the firm’s value, and in changing the firm’s chief executive officer (CEO) when (1) the controlling shareholder’s voting power is leveraged, or (2) when the CEO assumes a position on the board of directors simultaneously. We interpreted that these results are in line with the arguments in favor of the existence of a new agency cost, which is related to the undue obedience of board members to authority, such as the largest controlling shareholder or the CEO in Brazilian listed firms. |
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2023-02-28T13:48:35Z2023-02-28T13:48:35Z20172141053109210.1007/s10997-017-9375-713853457http://hdl.handle.net/1843/50505This study aims to identify whether a relationship exists between the controlling shareholders’ voting power and outside directors’ effectiveness in maximizing firms’ financial performance. We analyze a panel data with 3057 observations for the 2000–2012 period using a random effects model, logit and probit regressions, and the two-stage model of Heckman in the Brazilian stock market. Our findings show that firms whose controlling shareholders use dual class shares to leverage their voting power have less independence from the board and worse financial performance and market value. Further, the percentage of outside directors tends to be ineffective in increasing the firm’s value, and in changing the firm’s chief executive officer (CEO) when (1) the controlling shareholder’s voting power is leveraged, or (2) when the CEO assumes a position on the board of directors simultaneously. We interpreted that these results are in line with the arguments in favor of the existence of a new agency cost, which is related to the undue obedience of board members to authority, such as the largest controlling shareholder or the CEO in Brazilian listed firms.engUniversidade Federal de Minas GeraisUFMGBrasilFCE - DEPARTAMENTO DE CIÊNCIAS ADMINISTRATIVASAdministração de empresasVoting powerDual class sharesOutside directorsAgency costsDual class shares, board of directors’ effectiveness and firm’s market value: an empirical studyDual class shares board of directors effectiveness and firm s market value: an empirical studyinfo:eu-repo/semantics/publishedVersioninfo:eu-repo/semantics/articleLélis Pedro de AndradeAureliano Angel BressanRobert Aldo Iquiapazainfo:eu-repo/semantics/openAccessreponame:Repositório Institucional da UFMGinstname:Universidade Federal de Minas Gerais (UFMG)instacron:UFMGLICENSELicense.txtLicense.txttext/plain; charset=utf-82042https://repositorio.ufmg.br/bitstream/1843/50505/1/License.txtfa505098d172de0bc8864fc1287ffe22MD51ORIGINALDual class shares, board of directors’ effectiveness and firm’s market value an empirical study - s10997-017-9375-7-2.pdfDual class shares, board of directors’ effectiveness and firm’s market value an empirical study - s10997-017-9375-7-2.pdfapplication/pdf634586https://repositorio.ufmg.br/bitstream/1843/50505/2/Dual%20class%20shares%2c%20board%20of%20directors%e2%80%99%20effectiveness%20and%20firm%e2%80%99s%20market%20value%20an%20empirical%20study%20-%20s10997-017-9375-7-2.pdf16d238f63d636470237327b6ef7a7bc4MD521843/505052023-02-28 10:48:36.376oai:repositorio.ufmg.br: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Repositório de PublicaçõesPUBhttps://repositorio.ufmg.br/oaiopendoar:2023-02-28T13:48:36Repositório Institucional da UFMG - Universidade Federal de Minas Gerais (UFMG)false |
dc.title.pt_BR.fl_str_mv |
Dual class shares, board of directors’ effectiveness and firm’s market value: an empirical study |
dc.title.alternative.pt_BR.fl_str_mv |
Dual class shares board of directors effectiveness and firm s market value: an empirical study |
title |
Dual class shares, board of directors’ effectiveness and firm’s market value: an empirical study |
spellingShingle |
Dual class shares, board of directors’ effectiveness and firm’s market value: an empirical study Lélis Pedro de Andrade Voting power Dual class shares Outside directors Agency costs Administração de empresas |
title_short |
Dual class shares, board of directors’ effectiveness and firm’s market value: an empirical study |
title_full |
Dual class shares, board of directors’ effectiveness and firm’s market value: an empirical study |
title_fullStr |
Dual class shares, board of directors’ effectiveness and firm’s market value: an empirical study |
title_full_unstemmed |
Dual class shares, board of directors’ effectiveness and firm’s market value: an empirical study |
title_sort |
Dual class shares, board of directors’ effectiveness and firm’s market value: an empirical study |
author |
Lélis Pedro de Andrade |
author_facet |
Lélis Pedro de Andrade Aureliano Angel Bressan Robert Aldo Iquiapaza |
author_role |
author |
author2 |
Aureliano Angel Bressan Robert Aldo Iquiapaza |
author2_role |
author author |
dc.contributor.author.fl_str_mv |
Lélis Pedro de Andrade Aureliano Angel Bressan Robert Aldo Iquiapaza |
dc.subject.por.fl_str_mv |
Voting power Dual class shares Outside directors Agency costs |
topic |
Voting power Dual class shares Outside directors Agency costs Administração de empresas |
dc.subject.other.pt_BR.fl_str_mv |
Administração de empresas |
description |
This study aims to identify whether a relationship exists between the controlling shareholders’ voting power and outside directors’ effectiveness in maximizing firms’ financial performance. We analyze a panel data with 3057 observations for the 2000–2012 period using a random effects model, logit and probit regressions, and the two-stage model of Heckman in the Brazilian stock market. Our findings show that firms whose controlling shareholders use dual class shares to leverage their voting power have less independence from the board and worse financial performance and market value. Further, the percentage of outside directors tends to be ineffective in increasing the firm’s value, and in changing the firm’s chief executive officer (CEO) when (1) the controlling shareholder’s voting power is leveraged, or (2) when the CEO assumes a position on the board of directors simultaneously. We interpreted that these results are in line with the arguments in favor of the existence of a new agency cost, which is related to the undue obedience of board members to authority, such as the largest controlling shareholder or the CEO in Brazilian listed firms. |
publishDate |
2017 |
dc.date.issued.fl_str_mv |
2017 |
dc.date.accessioned.fl_str_mv |
2023-02-28T13:48:35Z |
dc.date.available.fl_str_mv |
2023-02-28T13:48:35Z |
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/1843/50505 |
dc.identifier.doi.pt_BR.fl_str_mv |
10.1007/s10997-017-9375-7 |
dc.identifier.issn.pt_BR.fl_str_mv |
13853457 |
identifier_str_mv |
10.1007/s10997-017-9375-7 13853457 |
url |
http://hdl.handle.net/1843/50505 |
dc.language.iso.fl_str_mv |
eng |
language |
eng |
dc.rights.driver.fl_str_mv |
info:eu-repo/semantics/openAccess |
eu_rights_str_mv |
openAccess |
dc.publisher.none.fl_str_mv |
Universidade Federal de Minas Gerais |
dc.publisher.initials.fl_str_mv |
UFMG |
dc.publisher.country.fl_str_mv |
Brasil |
dc.publisher.department.fl_str_mv |
FCE - DEPARTAMENTO DE CIÊNCIAS ADMINISTRATIVAS |
publisher.none.fl_str_mv |
Universidade Federal de Minas Gerais |
dc.source.none.fl_str_mv |
reponame:Repositório Institucional da UFMG instname:Universidade Federal de Minas Gerais (UFMG) instacron:UFMG |
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Universidade Federal de Minas Gerais (UFMG) |
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UFMG |
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UFMG |
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Repositório Institucional da UFMG |
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Repositório Institucional da UFMG |
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