scholarly journals Does strengthening large shareholders’ cash flow rights reduce their expropriation motivation? Evidence from China’s dividend tax reforms

2021 ◽  
pp. 100206
Author(s):  
Hang Liu
Keyword(s):  
Cash Flow ◽  
Tax Reforms ◽  
Large Shareholders ◽  
Cash Flow Rights ◽  
Dividend Tax

scholarly journals Controlling shareholders and corporate valuation in Brazil

2006 ◽  
Vol 3 (2) ◽  
pp. 137-141
Author(s):  
Ricardo P. C. Leal ◽  
Andre Carvalhal da Silva
Keyword(s):  
Cash Flow ◽  
Ownership Structure ◽  
Firm Valuation ◽  
Controlling Shareholder ◽  
Controlling Shareholders ◽  
Corporate Valuation ◽  
Large Shareholders ◽  
And Performance ◽  
Cash Flow Rights

This paper investigates the relation between the ownership structure, valuation and performance of Brazilian companies. The results show that large shareholders keep control while holding only a small fraction of cash flow rights. The evidence also indicates that non-voting shares and pyramiding are the main devices set to entrench the large controlling shareholder. There is some evidence that firm valuation and performance are negatively related to voting concentration, and that foreign-owned firms perform the best while government-owned firms perform the worst.

Do Negative Corporate Social Responsibility Events Signal Financial Misreporting? — Empirical Finding from Taiwan

2021 ◽  
Vol 24 (01) ◽  
pp. 2150004
Author(s):  
Ching-Lung Chen ◽  
Hann-Pyng Wang ◽  
Hung-Shu Fan ◽  
Shiu-Chieh Chiu
Keyword(s):  
Corporate Social Responsibility ◽  
Social Responsibility ◽  
Cash Flow ◽  
Financial Reporting ◽  
Internal Control ◽  
Empirical Finding ◽  
Internal Controls ◽  
Control Rights ◽  
Cash Flow Rights ◽  
Corporate Social

This study examines whether negative corporate social responsibility events (NCSRs) signal potential firm misreporting and pending financial reporting restatements. Without formal opinions on the effectiveness of internal controls over financial reporting in Taiwan, we hypothesize NCSRs can represent and/or signal a firm’s internal control weakness, which may in turn result in poor financial reporting. Note that the concern with controlling owners expropriating wealth through ineffective internal controls is given important weight by investors and regulators. We further examine whether the signaling function of NCSRs is more pronounced in contexts with a serious agency problem, such as is found in the high divergence of control and cash flow rights case (denoted as high excess control rights) in Taiwan. Empirical results indicate that, as conjectured, incidence of NCSRs is positively associated with the likelihood of reporting restatements. Further evidence reveals that this result is particularly pronounced in the high divergence of control and cash-flow rights subsample test. We demonstrate several diagnostic tests and show the results are robust in various specifications.

scholarly journals Evolution of ownership and control in Italian IPO firms

2008 ◽  
Vol 6 (2) ◽  
pp. 312-333 ◽  
Author(s):  
Silvia Rigamonti
Keyword(s):  
Cash Flow ◽  
Ownership Structure ◽  
Voting Rights ◽  
Set Up ◽  
Cash Flow Rights ◽  
And Control

This article examines the evolution of ownership of cash flow rights and control of voting rights of firms that went public in Italy over the period 1985-2005. At the IPO, the ownership structure does not evolve towards a dispersed one. Even 10 years after the flotation, the initial ultimate shareholder retains the majority of voting rights. Though control is valuable, original owners do not systematically set up structures that dissociate cash flow from voting rights.

Elements of Shareholder Democracy

2019 ◽  
pp. 334-464
Author(s):  
Carsten Gerner-Beuerle ◽  
Michael Schillig
Keyword(s):  
Decision Making ◽  
Cash Flow ◽  
Legal Systems ◽  
Corporate Power ◽  
Indirect Influence ◽  
Business Operations ◽  
The Law ◽  
Shareholder Democracy ◽  
Cash Flow Rights ◽  
Legal Sense

This chapter begins with a discussion of the origins of corporate power. Shareholders are often considered the owners of the corporation. However, this is questionable in an economic and social, if not a legal, sense. In fact, the position of shareholders in many legal systems is confined to that of mere investor who acquires cash flow rights, but has minimal (and only indirect) influence on business operations through the election of directors. Where shareholders (or, for that matter, directors) have the power to decide, the law needs to ensure that they do not abuse their position of power to the detriment of corporate actors bound by the decision without being able to influence it. The chapter then covers the limits of corporate power, shareholder decision-making, and the appointment and removal of directors.

scholarly journals Impact of Mode of Payment and Insider Ownership on Target and Acquirer's Announcement Returns in India

2009 ◽  
Vol 34 (4) ◽  
pp. 51-66 ◽  
Author(s):  
Bikram Jit Singh Mann ◽  
Reena Kohli
Keyword(s):  
Stock Market ◽  
Cash Flow ◽  
Value Added ◽  
Group Company ◽  
Controlling Shareholders ◽  
Acquisition Period ◽  
Tunnelling Effect ◽  
Maximum Value ◽  
Announcement Returns ◽  
Cash Flow Rights

This paper examines the effect of mode of financing employed in mergers and acquisitions on the announcement period returns of the acquiring and the target companies' shareholders in India. The study is divided into two sections. The first section analyses the announcement returns of both the acquiring as well as the target companies� shareholders with the help of market model. It has been found that maximum value has been created for the shareholders of the target companies engaged in cash offers followed by the shareholders of acquiring companies engaged in cash offers, target companies engaged in stock offers, and lastly, for acquiring companies engaged in stock offers. However, in contrast to the results of prior research, the study shows that the within-group stock offers have created positive wealth for acquiring companies� shareholders that have generally lost value in stock offers. To discern the probable reasons for the positive value being created in within-group stock offers especially for the acquiring companies� shareholders, the second section analyses the interaction between the announcement returns of the acquiring and the target companies engaged in stock offers and insiders'/promoters' ownership level. This is so because the review of literature highlights two views regarding value creation in within-group stock offers. One view relates to the tunnelling effect whereas the other relates to the value added effect. The tunnelling effect states that within group acquisitions by the acquiring companies with controlling shareholders are aimed at shifting the resources from one group company where the acquiring company has lower cash flow rights to another group company where it has higher cash flow rights or to itself for maximizing the benefits of the controlling shareholders at the expense of minority shareholders. The value added view states that within-group acquisitions by the acquiring companies with controlling shareholders are aimed at creating various financial and economic synergies by pooling the resources of both the companies in the post- acquisition period. The analysis reveals that the within-group stock offers have created value with increase in level of ownership with maximum value being created when controlling shareholders' ownership reaches the highest level (the category OWN> 49%). Likewise, not only acquiring companies' but the target companies' shareholders have gained positive returns. It means the stock market has reacted positively to the news of stock offers when these are undertaken by companies belonging to the same group as well as when the ownership is concentrated in the hands of promoters. Thus, we deduce that in India, within-group stock offers are not aimed at tunnelling of resources by the acquiring companies; rather these are aimed at creating value by providing an internal market where the group companies can pool their resources and hence can create various kinds of synergies in the post-acquisition period. Hence, the results are in consonance with the value added view. Thus, in the world of information asymmetry, the mode of financing along with ownership structures are the signals through which the stock market assesses the value creating potential of an acquisition.

Family Ownership and Pyramids in the Spanish Market

2007 ◽  
Vol 20 (3) ◽  
pp. 247-265 ◽  
Author(s):  
María Sacristán-Navarro ◽  
Silvia Gómez-Ansón
Keyword(s):  
Cash Flow ◽  
Family Ownership ◽  
Control Rights ◽  
Cash Flow Rights ◽  
Cross Shareholdings

This aim of this article is to describe, in the Spanish setting, family ownership and to explore how families hold their shares (the use of indirect ownership, pyramids, and cross-shareholdings). It also seeks to describe to what extent cash-flow rights differ from control rights and the degree of the firm's professionalization according to every type of owner category, but especially for families.

Earnings and dividend informativeness when cash flow rights are separated from voting rights

2005 ◽  
Vol 39 (2) ◽  
pp. 329-360 ◽  
Author(s):  
Jennifer Francis ◽  
Katherine Schipper ◽  
Linda Vincent
Keyword(s):  
Cash Flow ◽  
Voting Rights ◽  
Cash Flow Rights

Ownership structure, stock volatility and analyst independence

2014 ◽  
Vol 4 (2) ◽  
pp. 187-208 ◽  
Author(s):  
Xiaobao Song ◽  
Wenjia Zheng
Keyword(s):  
Cash Flow ◽  
Negative Correlation ◽  
Institutional Investors ◽  
Stock Return ◽  
Significant Negative Correlation ◽  
Control Rights ◽  
Analyst Following ◽  
Content Type ◽  
Cash Flow Rights ◽  
The Relationship

Purpose – The purpose of this paper is to examine securities analyst independence in China's capital market and the effect on analyst independence of institutional investors’ shareholding and separation between control rights and cash flow rights of ultimate controller. Design/methodology/approach – Using data of China's listed companies from 2006 to 2012, the authors empirically tested the relationship between analyst following and volatility of stock return. And based on the test, the authors investigated the role played by institutional investors’ ownership and separation between control rights and cash flow rights of ultimate controller. Findings – According to the empirical results, there is a significant negative correlation between analyst following and volatility of stock return. Also, shareholding of institutional investors and the separation between control rights and cash flow rights of ultimate controllers will have an impact on the relationship between analyst following and volatility of stock return. When institutional investors hold higher proportion or the separation between control rights and cash flow rights of ultimate controllers keeps at a high level, the negative correlation between analyst following and volatility of stock return will weaken. Originality/value – First, based on the theory of market intermediation, the paper examined analyst independence by investigating and analyzing the relationship between analyst following and volatility of stock return. Second, it analyzed the factors affecting analyst independence by integrating enterprise characteristic variable and market characteristic variable on the basis of introducing two variables – shareholding of institutional investors and the separation between control rights and cash flow rights of ultimate controllers.

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