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Insider Ownership (insider + ownership)

Distribution by Scientific Domains
Business, Economics, Finance and Accounting100%

Selected Abstracts

Insider ownership and firm performance in Taiwan's electronics industry: a technical efficiency perspective

MANAGERIAL AND DECISION ECONOMICS, Issue 5 2005
Her-Jiun Sheu
This paper applies agency theory to explore the relationship between insider stock ownership and firm performance, particularly in terms of technical efficiency. Insiders are further classified into executives, outside directors, and large shareholders to conduct a detailed study. Six-year (1996,2001) panel data of 416 Taiwanese listed electronics firms are examined by the stochastic production frontier approach. It is observed that raising the executive-to-insider holding ratio first causes a decrease and then an increase in technical efficiency, forming a U-shaped relationship. However, the board-to-insider holding ratio is negatively associated with technical efficiency. The results indicate that equity ownership of top officers in high-tech firms should be encouraged to enhance firm productivity. Copyright © 2005 John Wiley & Sons, Ltd. [source]

Corporate governance, insider ownership and operating performance of Australian initial public offerings

ACCOUNTING & FINANCE, Issue 3 2004
Maria C. A. Balatbat
We examine ownership structures and corporate governance attributes of 313 Australian initial public offerings (IPOs) between 1976 and 1993 and their relation with up to 5 years of post-listing operating performance, adjusted for similar (non-IPO) firms. Consistent with prior share price-based evidence, we find that the operating performance of Australian IPOs typically deteriorates over the first 4 post-listing years. Any evidence of a positive association between insider ownership and firm performance is confined to the fourth and fifth years after the IPO. Evidence of a positive relation between institutional ownership and performance is restricted to the latter part of our 5-year post-listing window. Board composition (i.e. outsider versus insider control) is not associated with operating performance, although there is some evidence that independent board leadership is associated with better operating performance. [source]

Home Bias in Leveraged Buyouts,

INTERNATIONAL FINANCE, Issue 3 2009
Peter Cornelius
In this paper, we examine cross-border investments in 2,260 portfolio companies by 102 buyout funds raised between 1995 and 2004. Using proprietary data compiled by AlpInvest Partners, we calculate the aggregate home bias of these funds as well as their home bias at the fund level. We find significant variation across funds. While UK-based funds are on average least home-biased, they show a high degree of intra-European bias. In comparison, US funds are found to be least home-biased in terms of inter-regional acquisitions, with Europe being the most important destination for US buyout capital. Furthermore, we find that buyout funds tend to be less home-biased than portfolio investors and, more specifically, mutual funds. This finding is consistent with the optimal ownership theory of the home bias, which predicts that foreign direct investment , as opposed to portfolio investment , represents the preferred choice of entry in countries where the quality of governance is perceived to be inferior, promoting insider ownership. [source]

Financial Globalization, Governance, and the Evolution of the Home Bias

JOURNAL OF ACCOUNTING RESEARCH, Issue 2 2009
BONG-CHAN KHO
ABSTRACT We merge portfolio theories of home bias with corporate finance theories of insider ownership to create the optimal corporate ownership theory of the home bias. The theory has two components: (1) foreign portfolio investors exhibit a large home bias against countries with poor governance because their investment is limited by high optimal ownership by insiders (the "direct effect" of poor governance) and domestic monitoring shareholders (the "indirect effect") in response to the governance and (2) foreign direct investors from "good governance" countries have a comparative advantage as insider monitors in "poor governance" countries, so that the relative importance of foreign direct investment is negatively related to the quality of governance. Using both country-level data on U.S. investors' foreign investment allocations and Korean firm-level data, we find empirical evidence supporting our optimal corporate ownership theory of the home bias. [source]

Do Family Firms Provide More or Less Voluntary Disclosure?

JOURNAL OF ACCOUNTING RESEARCH, Issue 3 2008
SHUPING CHEN
ABSTRACT We examine the voluntary disclosure practices of family firms. We find that, compared to nonfamily firms, family firms provide fewer earnings forecasts and conference calls, but more earnings warnings. Whereas the former is consistent with family owners having a longer investment horizon, better monitoring of management, and lower information asymmetry between owners and managers, the higher likelihood of earnings warnings is consistent with family owners having greater litigation and reputation cost concerns. We also document that family ownership dominates nonfamily insider ownership and concentrated institutional ownership in explaining the likelihood of voluntary disclosure. Using alternative proxies for the founding family's presence in the firm leads to similar results. [source]

Why Do Firms Become Widely Held?

THE JOURNAL OF FINANCE, Issue 3 2007
An Analysis of the Dynamics of Corporate Ownership
ABSTRACT We examine the evolution of insider ownership of IPO firms from 1970 to 2001 to understand how U.S. firms become widely held. A majority of these firms has insider ownership below 20% after 10 years. Stock market performance and liquidity play an extremely important role in ownership dynamics. Firms with stocks that are highly valued, are liquid, and have performed well experience large decreases in insider ownership and become widely held. Ownership also falls for low cash flow and high capital expenditures firms. Surprisingly, variables proxying for agency costs have limited success in explaining the evolution of insider ownership. [source]