scholarly journals Firm valuation, performance and origin of controlling shareholder in Brazil

2015 ◽  
Vol 12 (4) ◽  
pp. 535-540 ◽  
Author(s):  
Pedro Bruno ◽  
Andre Carvalhal
Keyword(s):  
Firm Performance ◽  
Firm Value ◽  
Firm Valuation ◽  
Significant Relation ◽  
Controlling Shareholder ◽  
Vast Literature ◽  
And Performance ◽  
Lower Valuation

This study analyzes if the origin of the controlling shareholder influences firm value and performance in Brazil. Although there is a vast literature on this topic, the results vary significantly and, in some cases, are even inconclusive. Our analysis of 407 Brazilian companies from 2002 to 2009 provide evidence that firms controlled by families and government have lower valuation. There is no significant relation between origin of control and firm performance.

scholarly journals Corporate governance and firm valuation – the case of China

2009 ◽  
Vol 7 (2) ◽  
pp. 21-29 ◽  
Author(s):  
Ohannes George Paskelian ◽  
Stephen Bell
Keyword(s):  
Firm Value ◽  
Cash Holdings ◽  
Firm Valuation ◽  
Government Ownership ◽  
Private Benefits ◽  
Controlling Shareholder ◽  
Foreign Investors ◽  
High Government ◽  
Corporate Cash Holdings ◽  
Strong Inverse Relationship

We examine the determinants and implications of Chinese corporate cash holdings in the 1993- 2006 period. Agency theories assert that firms with a large controlling shareholder have relatively large cash holdings because of the greater ability of the controlling shareholder to extract private benefits from the cash holdings. Our findings show a very strong inverse relationship between cash holdings and firm valuation in high government ownership firms. Also, we find that in firms with high government ownership, dividend payouts are highly valued. We conclude that Chinese investors see government ownership as a factor that reduces firm value. They prefer relatively higher dividends from firms having high government ownership. Conversely, investors assign much higher value to firms with relatively low government ownership and they tend to be neutral about the dividends payouts of such firms. Also, investors value highly the presence of foreign investors in Chinese firms and tend to be neutral about dividend payouts of firms with high foreign ownership concentration.

scholarly journals Does social responsibility matter for firm performance? Evidence from Brazil

2012 ◽  
Vol 9 (3) ◽  
pp. 132-141 ◽  
Author(s):  
Thiago Emmanuel ◽  
Andre Carvalhal da Silva ◽  
Marcos Avila
Keyword(s):  
Firm Performance ◽  
Social Responsibility ◽  
Financial Performance ◽  
Firm Value ◽  
Superior Performance ◽  
Social Report ◽  
Points Of View ◽  
And Performance ◽  
The Relationship ◽  
Over Time

This paper analyses the relationship between social responsibility and financial performance of Brazilian companies. This subject has been largely studied and presents many discussions and different points of view. There are a considerably number of research that tries to link social responsibility and financial performance. However, there is not a fully established consensus about the issue. Despite a great number of empirical researches regarding this subject, there are few studies in the Brazilian market. We analyze 515 Brazilian companies listed on BM&FBovespa from 2001 to 2007 and check which companies have disclosed the IBASE social report, which proposes a standardized methodology for social reporting and allows us to compare companies in different sectors over time. Our results indicate that companies that disclose social information have a superior performance when compared with companies that do not disclose. Moreover, financial performance is positively related with social investments. Interestingly, the "voluntary" social investments, which are not mandatory by law, have a strong effect on firm value and performance.

scholarly journals Agency costs, corporate governance mechanisms and performance of public listed family firms in Malaysia

2011 ◽  
Vol 42 (3) ◽  
pp. 17-26 ◽  
Author(s):  
H. Ibrahim ◽  
F. A. Samad
Keyword(s):  
Corporate Governance ◽  
Firm Performance ◽  
Firm Value ◽  
Agency Costs ◽  
Family Firms ◽  
Family Ownership ◽  
Governance Mechanisms ◽  
Corporate Governance Mechanisms ◽  
Utilization Ratio ◽  
And Performance

We compare corporate governance and performance between family and non-family ownership of public listed companies in Malaysia from 1999 through 2005 measured by Tobin’s Q and ROA. We also examine the governance mechanisms as a tool in monitoring agency costs based on asset utilization ratio and expense ratio as proxy for agency costs. We find that on average firm value is lower in family firms than non-family firms, while board size, independent director and duality have a significant impact on firm performance in family firms as compared to non-family firms. We also find that these governance mechanisms have significant impact on agency costs for both family and non-family firms.

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.

scholarly journals Does Smart & Powerful CEO Contribute to the Performance of Technology Companies?

2019 ◽  
Vol 13 (4) ◽  
pp. 39-58
Author(s):  
Elena Karnoukhova ◽  
Anastasia Stepanova
Keyword(s):  
Firm Performance ◽  
Firm Value ◽  
Educational Background ◽  
Least Square ◽  
Ceo Power ◽  
Highly Educated ◽  
And Performance ◽  
The Relationship ◽  
Ceo Characteristics ◽  
Hardware Industry

In recent decades, innovative companies became one of the major drivers of economy worldwide. According to surveys, nearly 70% of the world’s most innovative companies in 2019 are U.S. firms. However, academic studies mostly focused on the influence of the top management team and the board of director’s on the firm performance, on the relationship between innovations and CEO`s preferences. However, we suppose CEO can exert a significant influence on performance of innovative companies. We strive to show which CEO characteristics could lead to higher firm value. Does highly educated CEO contribute more to innovations in hi-tech sphere? Does CEO power matter? Are founders better CEOs than newcomers or professionals for technological companies with their longer horizons and higher risks? This research uses Generalized Least Square model on a sample of 12565 firm-year observations during 2004-2015 period. For this research we used data for three innovative industries: Pharmaceuticals, Biotechnology & Life Sciences, Software & Services and Technology Hardware & Equipment industries. We have hand-collected data from the CVs in CIQ database. Overall, the empirical results reveal that educational background, tenure, duality play crucial roles in explaining firm value. This study contributes to the existing literature in two aspects. First, our findings indicate that CEO characteristics play crucial roles in explaining technology firm value and performance. We demonstrated that founding CEO contributes to technology firm performance as well as the CEO with better education. Second, CEOs should be smart and powerful in order to sustain firm performance. We found that CEOs characteristics could mitigate the conflicts between different types of investors and their influence on firm performance. More specifically, CEOfounder was found to add greatly to the firm performance of Software and Pharmaceutical companies. Furthermore, the influence of CEO seems to mitigate the conflict of interest with independent active institutional investors in Hardware industry. We provided examples to prove the validity of our tests.

scholarly journals Rethinking Measurement of Pay Disparity and Its Relation to Firm Performance

2019 ◽  
Vol 95 (1) ◽  
pp. 343-378 ◽  
Author(s):  
Ethan Rouen
Keyword(s):  
Firm Performance ◽  
Empirical Models ◽  
Economic Factors ◽  
Positive Relation ◽  
Significant Relation ◽  
Employee Compensation ◽  
Firm Level ◽  
Pay Disparity ◽  
And Performance ◽  
Robust Evidence

ABSTRACT I develop measures of firm-level pay disparity and examine their relation to firm performance. Using comprehensive compensation data for a large sample of firms, I find no statistically significant relation between the ratio of CEO-to-mean employee compensation and performance. I next create empirical models that allow me to separate the components of CEO and employee compensation explained by economic factors from those that are not, and use these models to estimate explained and unexplained pay disparity. After validating my estimate of unexplained pay disparity as a proxy for pay fairness, I find robust evidence of a negative (positive) relation between unexplained (explained) pay disparity and future firm performance. JEL Classifications: G32; G35; J31; M12; M14; M52.

scholarly journals Remuneração Executiva, Valor e Desempenho das Empresas Brasileiras Listadas

2013 ◽  
Vol 11 (4) ◽  
pp. 481
Author(s):  
Andre Luiz Carvalhal da Silva ◽  
Alisson Chen Yi Chien
Keyword(s):  
Executive Compensation ◽  
Firm Value ◽  
Dynamic Models ◽  
Generalized Method Of Moments ◽  
Operational Performance ◽  
Sales Growth ◽  
Significant Relation ◽  
Executive Remuneration ◽  
And Performance ◽  
The Relationship

The aim of this study is to identify the relationship between executive compensation, firm value and performance in Brazil. The literature provides mixed results but most studies show that firms with higher executive compensation tend to have greater value and performance in comparison with companies with lower compensation. We analyze a unique Brazilian database to test this hypothesis. This paper differs from previous studies on executive remuneration in Brazil since it uses dynamic models, estimated by systemic generalized method of moments, to control potential sources of endogeneity. The analysis of 420 Brazilian companies from 2002 to 2009 does not indicate a significant relation between executive compensation and firm value (price-to-book and Tobin´s Q), suggesting that companies that pay greater executive remuneration do not have higher value. Furthermore there is no significant relation between executive compensation and operational performance (ROA and sales growth).

Debt financing and firm performance: an empirical study based on Swedish data

2015 ◽  
Vol 16 (1) ◽  
pp. 102-118 ◽  
Author(s):  
Darush Yazdanfar ◽  
Peter Öhman
Keyword(s):  
Firm Performance ◽  
Firm Value ◽  
Fixed Effects ◽  
Trade Credit ◽  
Equity Capital ◽  
Content Type ◽  
Debt Level ◽  
Fixed Effects Models ◽  
And Performance ◽  
The Relationship

Purpose – The purpose of this study is to examine the relationship between debt level and performance among small and medium-sized enterprises (SMEs). Design/methodology/approach – Unlike the vast majority of previous research, this study uses three-stage least squares (3SLS) and fixed-effects models to analyse a comprehensive, cross-sectoral sample of 15,897 Swedish SMEs operating in five industry sectors during the 2009-2012 period. Findings – This study confirms that debt ratios, in terms of trade credit, short-term debt and long-term debt, negatively affect firm performance in terms of profitability. As a high debt ratio seems to increase the agency costs and the risk of losing control of the firm, SME owners and managers tend to finance their businesses with equity capital to a fairly high degree. Practical implications – As debt policy significantly influences firm performance, and thereby firm value and survival, SME owners and managers should focus on finding a satisfactory debt level. Originality/value – To the authors’ best knowledge, this study is among the first to use 3SLS and fixed-effects models to analyse the relationship between debt level and firm performance. Moreover, while most previous research has examined listed firms, this study highlights the issue among SMEs, which play a fundamental role in the economy.

scholarly journals The influence of the board on firm performance: An empirical vision in the Spanish capital market

2006 ◽  
Vol 3 (3) ◽  
pp. 199-203
Author(s):  
Emma García-Meca ◽  
Juan Pedro Sánchez-Ballesta
Keyword(s):  
Corporate Governance ◽  
Firm Performance ◽  
Firm Value ◽  
Legal Protection ◽  
Independent Directors ◽  
Outside Directors ◽  
High Concentration ◽  
Governance System ◽  
Board Monitoring ◽  
And Performance

Corporate governance research suggests that board monitoring will be more effective if boards consist primarily of independent outside directors. However, the results of previous studies testing board effectiveness have been mixed. We offer new insights of these relationships in a country whose particular corporate governance system is characterized by high concentration of ownership, mainly through pyramidal groups, and low legal protection of investors. Specifically, the aim of this paper is to investigate the influence of the independent directors on firm performance in Spain. We find that the addition of independent directors to the boards increases firm value, as the relationship between the proportion of independent directors and performance is positive and significant

The Effect of Underreaction and Overreaction of Firm Stocks to Firm Valuation: Data from the Indonesian Stock Exchange

2019 ◽  
Author(s):  
Yohanes Indrayono
Keyword(s):  
Behavioral Finance ◽  
Firm Value ◽  
Intangible Assets ◽  
Stock Exchange ◽  
Investor Sentiment ◽  
Firm Valuation ◽  
Good News ◽  
Industrial Sectors ◽  
Tangible Assets ◽  
Firm Profitability

<p>This study contributes to the on-going studies on behavioral finance by providing a case study on underreaction and overreaction of firm stocks to firm valuation. We use the Model of Investor Sentiment (Barberis et al., 2005) to evaluate underreaction and overreaction behavior and reflect on specific findings in the Indonesian market. The result of the study is most of the stocks in the Indonesian Stock Exchange are more overreaction to the news of firm financial statements. Firms on the industry with more intangible assets measure more overreaction than firms on industries with more tangible assets. For stocks with overreaction, the stock firm value is positively affected by a change in the total assets and profitability, but not by change of book value. The result concretized no evidence that firm stocks overreacted to the news more than underreacting. In stock industrial sectors, the financial institutions and wholesale industry stocks demonstrated remarkable overreactions. Nonetheless, automotive, building construction, food and beverage as well as cement evidenced more underreaction. For better return in financial markets, investors may buy stocks of the firm on industry with more tangible assets when there is no good news about the increasing firm profitability and sales; nonetheless, they should buy stocks of the firm on industry with more intangible assets when there is no lousy news about the increasing firm profitability and sales. </p>

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