scholarly journals Towards an Indian Market for Corporate Control

1993 ◽  
Vol 18 (1) ◽  
pp. 27-38 ◽  
Author(s):  
N Venkiteswaran
Keyword(s):  
Corporate Governance ◽  
Mergers And Acquisitions ◽  
Corporate Control ◽  
Wide Area ◽  
Market Forces ◽  
Indian Market ◽  
Indian Economy ◽  
Significant Growth ◽  
Indian Industry ◽  
Market For Corporate Control

As the Indian economy is being modernized through dismantling of rigid controls and greater reliance on market forces, the Indian industry is likely to witness major restructuring through a spate of mergers and acquisitions. This paper by N Venkiteswaran examines the historical impediments against corporate restructuring through mergers and takeovers in India. The author is of the view that given the economic compulsions, India is also about to witness significant growth in mergers and acquisitions in the coming years. In this emerging scenario, the importance of regulatory reforms covering a wide area such as competition, investor protection, taxation, corporate governance, etc. is underscored so that the Indian market for corporate control is developed along orderly lines.

Tradeoffs in Corporate Governance: Evidence From Board Structures and Charter Provisions

2011 ◽  
Vol 01 (04) ◽  
pp. 667-705 ◽  
Author(s):  
Stuart L. Gillan ◽  
Jay C. Hartzell ◽  
Laura T. Starks
Keyword(s):  
Corporate Governance ◽  
Corporate Control ◽  
Board Independence ◽  
Governance Structures ◽  
Board Structure ◽  
System Of Equations ◽  
Costs And Benefits ◽  
Market For Corporate Control ◽  
Monitoring Mechanism ◽  
Three Stage Least Squares

We provide arguments and present evidence that corporate governance structures are composed of interrelated mechanisms, which are in turn endogenous responses to the costs and benefits firms face when they choose those mechanisms. Examining board structures and the use of corporate charter provisions in a sample of more than 2,300 firms over a four-year period, we find that firms cluster in their use of governance mechanisms. In particular, the set of charter provisions that firms use, as measured by the Gompers et al. (2003) G Index, is associated with board structure, with the laws of the state in which the firm is incorporated, and with firm and industry characteristics. We also find that some governance structures appear to serve as substitutes. Specifically, firms that have powerful boards (as measured by board independence) also have the greatest number of charter provisions, suggesting that the market for corporate control is less effective as a monitoring mechanism for these firms. In contrast, firms that have less powerful boards tend to have few charter provisions, suggesting that the market for corporate control plays a greater monitoring role at such firms. To address potential endogeneity issues, we employ three-stage least squares analysis to estimate these relationships within a system of equations. Our results from this analysis are consistent with the hypothesis that powerful boards serve as a substitute for the market for corporate control. Finally, our findings suggest that causality runs from the board to the choice of charter provisions, but not vice versa.

scholarly journals Corporate Governance and Innovation: Theory and Evidence

2014 ◽  
Vol 49 (4) ◽  
pp. 957-1003 ◽  
Author(s):  
Haresh Sapra ◽  
Ajay Subramanian ◽  
Krishnamurthy V. Subramanian
Keyword(s):  
Corporate Governance ◽  
Corporate Control ◽  
Empirical Support ◽  
Innovation Theory ◽  
Private Benefits ◽  
Private Benefits Of Control ◽  
Market For Corporate Control ◽  
Ex Post ◽  
Corporate Governance Mechanisms ◽  
Ex Ante

AbstractWe develop a theory to show how external and internal corporate governance mechanisms affect innovation. We predict a U-shaped relation between innovation and external takeover pressure, which arises from the interaction between expected takeover premia and private benefits of control. Using ex ante and ex post innovation measures, we find strong empirical support for the predicted relation. We exploit the variation in takeover pressure created by the passage of antitakeover laws across different states. Innovation is fostered either by an unhindered market for corporate control or by antitakeover laws that are severe enough to effectively deter takeovers.

scholarly journals Beyond Dichotomy: The Curvilinear Impact of Employee Ownership on CEO entrenchment

2019 ◽  
Vol 22 (2) ◽  
pp. 112-127 ◽  
Author(s):  
Xavier Hollandts ◽  
Nicolas Aubert ◽  
Abdelmehdi Ben Abdelhamid ◽  
Victor Prieur
Keyword(s):  
Corporate Governance ◽  
Corporate Control ◽  
Listed Companies ◽  
Employee Ownership ◽  
Curvilinear Relationship ◽  
Stock Ownership ◽  
Employee Stock Ownership ◽  
Market For Corporate Control ◽  
Legislative Changes ◽  
The Relationship

Employee stock ownership gives employees a voice and therefore may have a major impact on corporate governance. Thus, employee stock ownership may be a powerful mean to protect CEOs from both market for corporate control and dismissal threat. In this paper, we examine the relationship between employee stock ownership and CEO entrenchment. Following the recent French legislative changes, we use a comprehensive panel dataset of the major French listed companies over the 2009-2012 period. We document inverted U-shaped relationships between employee stock ownership and CEO entrenchment. Board employee ownership representation also plays a role and increases the inflexion points of these curvilinear relationship.

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