The aim of this paper is to consider the problem of politicians＇ control of state-owned enterprises in a transforming economy. The control of a company can be treated as a choice of a strategy pursued by this company...The aim of this paper is to consider the problem of politicians＇ control of state-owned enterprises in a transforming economy. The control of a company can be treated as a choice of a strategy pursued by this company. In order to present politicians＇ influence on a company＇s strategy, we consider the case of a firm controlled by the State Treasury （i.e., by politicians） and a company outside politicians＇ control, both functioning in a favorable and an unfavorable state of the economy. We propose the option-to-switch valuation model as a method of measuring politicians＇ private benefits of control. We illustrate the considerations using data concerning Poland＇s printing industry.展开更多
The topic of the paper is the estimate of the benefit of control, according to the Barclay and Holderness method. The reference system of this research is Italy, given that the empirical evidence of the past which had...The topic of the paper is the estimate of the benefit of control, according to the Barclay and Holderness method. The reference system of this research is Italy, given that the empirical evidence of the past which had underlined private benefits particularly high among Italian companies and the reference period is 1999-2007. The idea of this research is to demonstrate that, since the Legislative Decree No. 58 of February 24, 1998 （Consolidated Law on Finance, henceforth Consolidated Law）, which has significantly changed the protection of minority shareholders, in Italian, the intensity of private benefits has on average declined sharply. To this end, considering the results of the empirical researches on periods pre-1998 and at the turn of the Consolidated Law, the paper provides evidence that the improvement of minority shareholder protection already shown by these researches is further accentuated over the years, because of the effects that the new regulatory framework has produced. In fact, the basic assumption is that the important laws, as Consolidate Law, require several years to produce the desired results in full. This idea is supported by the findings of research that show an average percentage of private benefits dropped to five percent of the capital. Hence, the investigation is extended to the demonstration of comparability of this estimation with other estimations quoted in literature, verifying the statistical significance of the correlations between the measures estimated and the variables considered as determinants in much of the literature.展开更多
We develop a model to illustrate that controlling shareholders choose the level of investor protection that maximizes their own interests. Controlling shareholders in companies with complicated control structures can ...We develop a model to illustrate that controlling shareholders choose the level of investor protection that maximizes their own interests. Controlling shareholders in companies with complicated control structures can easily extract private benefits and are thus reluctant to enhance investor protection which would necessitate increased transparency. In contrast, controlling shareholders in companies with valuable growth opportunities are willing to improve investor protection so that they can benefit from the increased value resulting from the lower cost of capital. We test this prediction using firm-level data in China. The results show that the level of investor protection increases with decreases in control structure opacity and increases in growth opportunities. The correlation is more significant for enforcement than for the mechanisms of investor protection.展开更多
By analyzing block share transfers in China during 1999-2006,this study provides estimates of the private benefits of corporate control in China.We find that those controlling blocks are usually priced at a significan...By analyzing block share transfers in China during 1999-2006,this study provides estimates of the private benefits of corporate control in China.We find that those controlling blocks are usually priced at a significant positive premium compared to those comparable non-controlling blocks.The benefits of corporate control vary with shareholders structure,firm characteristics and institutional variables.In particular,targets with a high intangible asset ratio have less benefits of control,cross-listing in B or H shares curbs the extract of private benefits and companies acquired by private firms are associated with higher private benefits.Moreover,it is found that benefits of control are negatively associated with market economy and factor market development index.We argue that firms with higher private benefits experience more tunneling activities by their controlling shareholders.展开更多
This paper is a case study based on the privatization of Guoguang Ceramics.It is found that,contrary to the thoughts of some scholars, corporation performance actually deteriorated,rather than improved under privatiza...This paper is a case study based on the privatization of Guoguang Ceramics.It is found that,contrary to the thoughts of some scholars, corporation performance actually deteriorated,rather than improved under privatization.We analyze ownership arrangements before and after privatization and find that private ownership arrangements still have deficiencies and are not necessarily better than state ownership arrangements.The existence of private benefits of control is the essential reason why performance had been deteriorating.Private benefits of control under state ownership come from the government’s multiple objectives of corporation control,whereas the benefits with private ownership lie on resources transferred from the corporation.Ta succeed in privatizing SOEs,it is essential that legal systems be strengthened to effectively oversee private benefits of control.展开更多
文摘The aim of this paper is to consider the problem of politicians＇ control of state-owned enterprises in a transforming economy. The control of a company can be treated as a choice of a strategy pursued by this company. In order to present politicians＇ influence on a company＇s strategy, we consider the case of a firm controlled by the State Treasury （i.e., by politicians） and a company outside politicians＇ control, both functioning in a favorable and an unfavorable state of the economy. We propose the option-to-switch valuation model as a method of measuring politicians＇ private benefits of control. We illustrate the considerations using data concerning Poland＇s printing industry.
文摘The topic of the paper is the estimate of the benefit of control, according to the Barclay and Holderness method. The reference system of this research is Italy, given that the empirical evidence of the past which had underlined private benefits particularly high among Italian companies and the reference period is 1999-2007. The idea of this research is to demonstrate that, since the Legislative Decree No. 58 of February 24, 1998 （Consolidated Law on Finance, henceforth Consolidated Law）, which has significantly changed the protection of minority shareholders, in Italian, the intensity of private benefits has on average declined sharply. To this end, considering the results of the empirical researches on periods pre-1998 and at the turn of the Consolidated Law, the paper provides evidence that the improvement of minority shareholder protection already shown by these researches is further accentuated over the years, because of the effects that the new regulatory framework has produced. In fact, the basic assumption is that the important laws, as Consolidate Law, require several years to produce the desired results in full. This idea is supported by the findings of research that show an average percentage of private benefits dropped to five percent of the capital. Hence, the investigation is extended to the demonstration of comparability of this estimation with other estimations quoted in literature, verifying the statistical significance of the correlations between the measures estimated and the variables considered as determinants in much of the literature.
基金supported by the National Natural Science Foundation (No.70632001)the Ministry of Education of the People’s Republic of China (No.07JJD630009,No.08JC630073)
文摘We develop a model to illustrate that controlling shareholders choose the level of investor protection that maximizes their own interests. Controlling shareholders in companies with complicated control structures can easily extract private benefits and are thus reluctant to enhance investor protection which would necessitate increased transparency. In contrast, controlling shareholders in companies with valuable growth opportunities are willing to improve investor protection so that they can benefit from the increased value resulting from the lower cost of capital. We test this prediction using firm-level data in China. The results show that the level of investor protection increases with decreases in control structure opacity and increases in growth opportunities. The correlation is more significant for enforcement than for the mechanisms of investor protection.
文摘By analyzing block share transfers in China during 1999-2006,this study provides estimates of the private benefits of corporate control in China.We find that those controlling blocks are usually priced at a significant positive premium compared to those comparable non-controlling blocks.The benefits of corporate control vary with shareholders structure,firm characteristics and institutional variables.In particular,targets with a high intangible asset ratio have less benefits of control,cross-listing in B or H shares curbs the extract of private benefits and companies acquired by private firms are associated with higher private benefits.Moreover,it is found that benefits of control are negatively associated with market economy and factor market development index.We argue that firms with higher private benefits experience more tunneling activities by their controlling shareholders.
文摘This paper is a case study based on the privatization of Guoguang Ceramics.It is found that,contrary to the thoughts of some scholars, corporation performance actually deteriorated,rather than improved under privatization.We analyze ownership arrangements before and after privatization and find that private ownership arrangements still have deficiencies and are not necessarily better than state ownership arrangements.The existence of private benefits of control is the essential reason why performance had been deteriorating.Private benefits of control under state ownership come from the government’s multiple objectives of corporation control,whereas the benefits with private ownership lie on resources transferred from the corporation.Ta succeed in privatizing SOEs,it is essential that legal systems be strengthened to effectively oversee private benefits of control.
