James W. Wansley, M. Cary Collins and Amitabh S. Dutta
Recent studies have shown that the level of insider holdings and firm value are related in a nonlinear manner. Other studies find that the level of debt in a firm's capital…
Abstract
Recent studies have shown that the level of insider holdings and firm value are related in a nonlinear manner. Other studies find that the level of debt in a firm's capital structure declines with increases in its growth options. The principal‐agent relationship maintains that an increase in the equity stake of insiders reduces the agency costs of issuing debt. Extension of this premise suggests, however, that the agency costs of debt rise with extremely high levels of insider holdings as insiders consume perquisites to the detriment of outside stakeholders, revealing a nonlinear relation attributable to agency costs. We examine the relation between debt financing and insider holdings for 1894 firms at the end of 1989. In keeping with the hypothesized relation, the cross‐sectional regressions of leverage on insider holdings reveal significant nonlinearities. Leverage first rises with insider holdings and then declines. The positive relation between leverage and insider holdings returns as inside ownership approaches 100 percent. These results hold for two different measures of leverage and after controlling for industry differences in leverage, tax shields, firm size, growth options, and earnings or return volatility. The results also hold when regulated firms are excluded from the analysis.
Gregory A. Kuhlemeyer, M. Cary Collins and Harold A. Black
Refers to previous research on the effects of poor external audits on agency costs to shareholders and takes the 1991 disciplinary action by the US Securities and Exchange…
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Refers to previous research on the effects of poor external audits on agency costs to shareholders and takes the 1991 disciplinary action by the US Securities and Exchange Commission against Ernst and Young (re the Republic Bank) as an example to examine the effect on its other audit clients and on financial institutions. Uses event study methods to show that there were no statistically abnormal returns for financial institutions or for Ernst and Young’s audit clients; but significant negative returns for firms audited by non‐big six auditors.
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Harold A. Black, M. Cary Collins and Breck L. Robinson
Outlines the US development of the “too‐big‐to‐fail” (TBTF) doctrine following the collapse of the Continental Illinois Bank, reviews relevant research and explores the impact on…
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Outlines the US development of the “too‐big‐to‐fail” (TBTF) doctrine following the collapse of the Continental Illinois Bank, reviews relevant research and explores the impact on the efficiency of the banking system. Uses 1983‐1985 call report data, explains the methodology and presents the results, which analyse economies and diseconomies of scope and scale between different types of loans; and levels of inefficiency for TBTF and non‐TBTF banks. Shows that TBTF banks had the greatest increase in inefficiency following Continental’s failure but reduced this in the following year, as did small banks which did not benefit from complete depository coverage. Confirms that the TBTF doctrine increased stability for all banks, but particularly those covered by the doctrine.
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1972 saw the bicentenary of the only librarian to have been buried in Westminster Abbey. He lies close to Samuel Johnson in Poets' Corner, the words ‘Translator of Dante’ on his…
Annette Risberg and Sofie Skovbo Gottlieb
The authors review literature that focuses on women and minorities in the context of mergers and acquisitions (henceforth referred to as mergers for the sake of simplicity) aiming…
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The authors review literature that focuses on women and minorities in the context of mergers and acquisitions (henceforth referred to as mergers for the sake of simplicity) aiming to explore how and to what extent diversity and gender issues are studied in merger research. The authors sort the reviewed research into three themes: the impact of gender on merger outcome, the impact of merger on women and minorities, and the impact of merger on diversity management and equality work. The authors suggest that it is important to conduct further studies on the topic but also assert that merger managers can learn from diversity management literature and practices how to manage employees with diverse backgrounds during the post-merger integration.
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The librarian and researcher have to be able to uncover specific articles in their areas of interest. This Bibliography is designed to help. Volume IV, like Volume III, contains…
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The librarian and researcher have to be able to uncover specific articles in their areas of interest. This Bibliography is designed to help. Volume IV, like Volume III, contains features to help the reader to retrieve relevant literature from MCB University Press' considerable output. Each entry within has been indexed according to author(s) and the Fifth Edition of the SCIMP/SCAMP Thesaurus. The latter thus provides a full subject index to facilitate rapid retrieval. Each article or book is assigned its own unique number and this is used in both the subject and author index. This Volume indexes 29 journals indicating the depth, coverage and expansion of MCB's portfolio.
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Philipp Geiler and Addis Gedefaw Birhanu
The authors examine the role of national corporate governance characteristics on both the number of deals and the total value of acquisitions in 28 European countries between 2008…
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The authors examine the role of national corporate governance characteristics on both the number of deals and the total value of acquisitions in 28 European countries between 2008 and 2015. In line with previous studies, our analysis suggests that deal value and number of acquisitions follow a cyclical trend but each with different peaks and troughs throughout the sample period. Likewise, we observe a positive relationship between the level of GDP and the number as well as the total value of acquisitions. Among the three types of corporate governance institutions, namely corporate ethics, accountability, and financial market development (efficiency), the authors find that efficiency and a relatively higher level of corporate ethics within the target country in comparison to the acquirer country are positively related to the value of acquisitions.
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Tom Bellairs, Jonathon R. B. Halbesleben and Matthew R. Leon
Sudden crises, known as environmental jolts, can cripple unprepared organizations. In recent years, financial jolts have led many organizations, particularly government…
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Sudden crises, known as environmental jolts, can cripple unprepared organizations. In recent years, financial jolts have led many organizations, particularly government organizations, to respond by furloughing employees. Furloughs can engender various responses in employees that can lead to negative work outcomes for both the employees and the organization. Previous research shows that the implementation of strategic human resource management (SHRM) practices, such as commitment-based systems, can mitigate the negative effects of environmental jolts. Utilizing the knowledge-based view and affective events theory, we propose a multilevel model where SHRM practices moderate employee affective responses to furloughs, which, in turn, drive subsequent employee behavioral outcomes.