Groß Equity Ownership and Performance

An Empirical Study of German Traded Companies
2007
ISBN: 978-3-7908-1934-2
Verlag: Physica
Format: PDF
Kopierschutz: 1 - PDF Watermark

E-Book, Englisch, 373 Seiten, eBook

Reihe: Contributions to Economics

Corporate governance has been at the center of interest in the corporate- nance literature for the past decade. The discussion has continuously int- si?ed due to the occurrence of multiple corporate governance failures which have triggered the introduction or further re?nement of national and inter- tional corporate governance codes. The necessity of regulatory action however rests on the need for a sound understanding of potentially negative e?ects of ownership structure on ?nancial performance. Unfortunately, the empirical literature so far has not delivered consistent evidence leaving the overall e?ects still somewhat in the open. This incons- tency is argued to stem from di?erent biases in the statistical analysis, where the most important ones are the endogeneity and simultaneity bias. The - jective of this dissertation is to provide less distorted results by modelling various ownership aspects and performance simultaneously. The study sets out with a simultaneous equations analysis of the re- tionship between general ownership concentration and performance. This is followed by an examination of more speci?c ownership e?ects with a foll- up model focusing on managerial ownership and another one on institutional ownership. Subsequently, the author combines the three previous models in a ?nal comprehensive analysis which allows for the simultaneous assessment and separation of the di?erent ownership and performance e?ects. Withitsstate-of-the-artanalysis,thedissertationcontributessubstantially to the existing international empirical literature on the relationship between corporate ownership and performance. I wish for this dissertation to give impetus to and become widely accepted by corporate governance researchers and practitioners alike.

Zielgruppe

Research

Autoren/Hrsg.

Groß, Kerstin

Inhaltsverzeichnis

Basic Aspects of Ownership Structure and Performance.- Theoretical Background and Hypotheses.- Model, Methodology and Data.- Empirical Analyses.- Conclusion.

Leseproben

2 Basic Aspects of Ownership Structure and Performance (p. 9-10)

2.1 Introduction

To introduce the subject, the following chapter starts by taking a closer look on the concept and the di.erent aspects of ownership structure. This is implemented by an elaboration on the di.erent measures and their development in literature. The section will make clear that ownership is not summarizable in one single or a few variables, but that it constitutes rather a large spectrum of measures due to its di.erent aspects and dimensions. Therefore, ownership variables can always mirror only a part of the real ownership structure, which makes the variable selection an important issue in the ownership and performance literature.

Next Section 2.3 states some statistics on the ownership structure of di.erent countries and compares them to the characteristics of the German market. This will verify the advantageousness of German corporations as research objects. Finally, the literature also uses varying forms of performance measures. They can be distinguished by the applied data type, market-based, accountingbased and hybrid measures. Each type raises di.erent problems. The measures of .nancial performance and their appropriateness in the ownership literature are discussed in the Section 2.4.

2.2 Ownership Structure and its Measures

The following section introduces the reader to the concept of ownership structure. This is done by an elaboration on the di.erent aspects of ownership structure and the resulting measures. The discussion of the various forms of measures and the way they are mirroring the ownership structure is of further importance for the later variable selection.

After assessing some general issues of ownership information, di.erent forms of ownership measures are explained. They are examined by their classi .cation into non-metric and metric measures. Finally, some concluding remarks summarize the topic.

2.2.1 General Aspects of Ownership Structure and its Measures

Ownership structure is a multidimensional construct which therefore cannot be mirrored by a single variable. Two major dimensions structuring ownership information are ownership concentration and owner type.

The ownership concentration renders quantitative information on ownership, representing a share size or the sum of shares or a concentration index, e.g., Her.ndahl coe.cient. The second dimension, the owner’s identity, is the qualitative information about the type of shareholder. This information is important since di.erent owner types have di.erent incentives, utility functions and means of control.2 Widely researched identities are management insiders, with the subgroups of o.cers and directors, and institutional investors. These also constitute the main focus of this work. Further identities like families, company founders, strategic investors and governmental organizations have also gained importance, but are not considered in the course of the dissertation.