Abstract: This study investigates the principal-principal conflict among multiple large shareholders. The principal-principal conflict emerges in a two-blockholder firm when the larger blockholder dislikes the cumulative voting rule even if the smaller blockholder welcomes the rule and the rule is positively associated with firm value. The likelihood of firms observing the cumulative voting rule decreases when both blockholders are either inside blockholders or outside ones at the same time. Firms with different types of blockholders are more likely to follow the cumulative voting rule. When the voting power of blockholders is relatively equally distributed, the firm is more likely to have the cumulative voting rule. Relying on two-stage treatment effects models, I conduct empirical tests of these arguments on a large merged dataset.

Abstract: In our paper we present a general model of agency that extends classical Agency Theory to model the agent-principal relationship as being embedded in a wider social context. In this context the agent is not merely in a closed contractual relationship with the principal, but also participates in a market for alternative contracts. Participation in this market for alternative contracts allows the agent to redefine his or her ex ante value via behaviors that we define as external agency - specific agentic behaviors that aim at maximizing the value appropriation from future contracts. We propose that such behaviors will be negatively associated with internal agency and positively related to availability of alternative contracts, CEO human and social capital.

Abstract: We examine the influence of different owners on corporate restructuring in large French firms with family blockholders in a period of important corporate governance changes, where the respective influence of Anglo-American institutional owners and domestic owners has been the object of debate. We contribute to corporate governance and strategy research with a contingent framework about the influence of owners in shaping restructuring and refocusing, a predominant practice in the U.S. aimed at shareholder value maximization (SVM) in a country (France) without historical association to SVM. We find that firms engage in more restructuring and refocusing as the influence of both French families and Anglo-American institutional investors increases. This challenges in part the received wisdom about the influence of domestic owners in corporatist countries at the same time that confirms the effect of Anglo-American institutional investors.

Abstract: Empirical results so far have failed to provide consistent evidence about the relationship between institutional ownership and firm performance. We fill this gap by arguing that monitoring capabilities of institutional investors are contingent on the informational transparency of the industry. Institutional investors lack specific industry-based knowledge, thus information opacity makes it difficult to perform effective monitoring. Hence, the monitoring effect of institutional ownership on the performance will have positive impact only in transparent industries, where information is easily available and monitoring can be executed based on general business judgment. As monitoring by institutional investors is not efficient in the opaque industries, managerial stock ownership is proposed as a key means to align managers’ interests with other stockholders and subsequently enhance firm performance.

Abstract: In this study, I examine the performance implications of locating units of different ownership structures in the same local market. In a multi-unit organization, individual entities of different owners tend to compete with each other. Meanwhile, localized learning and collaboration can also be more effective when units of mixed ownership coexist in the same local market. I suggest that diverse ownership structures in a multi-unit organization can both intensify competition and facilitate cooperation. I develop these ideas among sub-units of a franchising system and test the hypotheses using longitudinal data from over 6000 units within one of the biggest U.S. restaurant chains from 1991 to 1997.

Abstract: Using a novel methodological approach, we examine the optimal structure of firm equity ownership. Prior studies have attempted to address, with mixed results, the endogenous nature of the relationship between equity ownership and firm value. A major empirical shortcoming of this stream of research is the treatment of ownership percentages as independent. We take a markedly different approach by modeling the equity ownership structure across major parties (i.e., the CEO, top executives, directors, institutions, etc.) as components of a mixture that by definition cannot change without affecting the other components. Controlling for other firm characteristics, our results suggest a significant and complex relationship between equity structure and firm value, allowing us to contribute to both scholarship and practice.