Corporate Governance of Dual Class Firms

2012 ◽  
Author(s):  
Ting Li ◽  
Nataliya S. Zaiats
Keyword(s):  
Corporate Governance ◽  
Dual Class

scholarly journals Corporate governance, family firms, and innovation

2020 ◽  
Vol 18 (1) ◽  
pp. 138-151
Author(s):  
Brian Bolton ◽  
Jung Eung Park
Keyword(s):  
Corporate Governance ◽  
Family Firms ◽  
Governance Mechanisms ◽  
Managerial Entrenchment ◽  
Ownership Structures ◽  
Corporate Governance Mechanisms ◽  
Dual Class ◽  
The Impact ◽  
Comprehensive Study ◽  
Board Ownership

We provide a comprehensive study of how corporate governance influences innovation at family firms. Specifically, we consider productive innovation or the impact that R&D spending has on firm revenues. First, we find that family firms do indeed generate more productive innovation than non-family firms, perhaps because they are better able to have a longer-term perspective. We then show how different corporate governance mechanisms influence this relationship. In general, board ownership and CEO ownership are associated with more productive innovation at all firms. Importantly, we find that managerial entrenchment leads to more productive innovation in general, consistent with prior research; however, contrary to prior research, we do not find this result at family firms, suggesting that it’s the ownership relationship, not managerial entrenchment, that drives innovation. We also find that independent boards are associated with greater innovation at family firms but not at non-family firms. Finally, we find that dual-class share structures are harmful for innovation at all firms. Our primary contributions are identifying how firms with different ownership structures focus on creating productive innovation and analyzing how ownership structures interact with different corporate governance mechanisms to allow the firm to make longer-term investments in innovation.

Policy Choices and Conclusions

2019 ◽  
pp. 101-104
Author(s):  
Anita Indira Anand
Keyword(s):  
Corporate Governance ◽  
Executive Compensation ◽  
Policy Choices ◽  
Important Phenomenon ◽  
Contractual Relationships ◽  
Dual Class

This concluding chapter argues that the nexus-of-contract model continues to bear importance in analyses of the corporation but that this model only explains part of the story. While the corporation is certainly a hub of contractual relationships, it remains subject to the increasingly important phenomenon of shareholder-driven corporate governance (SCG). The chapter examines policy choices in a regime that allows and facilitates SCG. SCG is a trend to be observed, but it is also an ideal to be achieved. Achieving this ideal calls for greater shareholder participation in corporate governance, a weighty objective that can be reached by providing shareholders with the ability to nominate directors, imposing protections in dual-class share companies, and imposing restrictions on executive compensation, for example.

scholarly journals Ownership Concentration, Corporate Governance and Firm Performance: Evidence from Pakistan

2008 ◽  
Vol 47 (4II) ◽  
pp. 643-659 ◽  
Author(s):  
Attiya Y. Javid ◽  
Robina Iqbal
Keyword(s):  
Corporate Governance ◽  
Ownership Structure ◽  
Agency Problem ◽  
Governance Structure ◽  
Minority Shareholders ◽  
Corporate Governance Structure ◽  
Economic Landscape ◽  
Cash Flow Rights ◽  
Pyramid Structures ◽  
Dual Class

The nature of relation between the ownership structure and corporate governance structure has been the core issue in the corporate governance literature. From a firms’ perspective, ownership structure determines the firms’ profitability, enjoyed by different stake-holders. In particular, ownership structure is an incentive device for reducing the agency costs associated with the separation of ownership and management, which can be used to protect property rights of the firm [Barbosa and Louri (2002)]. With the development of corporate governance, many corporations owned by disperse shareholders and are controlled by hire manager. As a results incorporated firms whose owners are dispersed and each of them owns a small fraction of total outstanding shares, tend to under-perform as indicated by Berle and Means (1932). Latter this theoretical relationship between a firm’s ownership structure and its performance is empirically examined by Jensen and Meckling (1976) and Shlefier and Vishny (1986). In most of developing markets including Pakistan, the closely held firms (family or state-controlled firms or firms held by corporations and by financial institutions) dominate the economic landscape. The main agency problem is not the managershareholder conflict but rather the risk of expropriation by the dominant or controlling shareholder at the expense of minority shareholders. The agency problem in these markets is that control is often obtained through complex pyramid structures,1 interlock directorship,2 cross shareholdings,3 voting pacts and/or dual class voting shares that allow the ultimate owner to maintain (voting) control while owning a small fraction of ownership (cash flow rights).

Dual-class unifications and corporate governance in Brazil

2014 ◽  
Vol 20 ◽  
pp. 89-108 ◽  
Author(s):  
Patrícia M. Bortolon ◽  
Ricardo P. Câmara Leal
Keyword(s):  
Corporate Governance ◽  
Dual Class

Corporate governance and firm value at dual class firms

2018 ◽  
Vol 36 (1) ◽  
pp. 47-71 ◽  
Author(s):  
Ting Li ◽  
Nataliya Zaiats
Keyword(s):  
Corporate Governance ◽  
Firm Value ◽  
Dual Class
Sign in / Sign up

Export Citation Format

Share Document