Corpus ID: 201086585

The Effect of Ownership Structure and Board Independence on Firm Value : Evidence from Controlled Companies

  title={The Effect of Ownership Structure and Board Independence on Firm Value : Evidence from Controlled Companies},
  author={Dain C. Donelson and Christopher G. Yust},
Controlled companies are public firms in which an individual, group or company holds more than 50 percent of the voting power. These firms are an economically significant part of the economy but are not directly examined by prior research. Importantly, they may opt out of independence requirements for the board and certain committees mandated by the major stock exchanges. Despite concerns about whether controlled companies act in shareholders’ best interests, they exhibit a valuation premium… Expand
1 Citations

Figures and Tables from this paper

The Factors Affecting the Corporate Cash Holdings in Listed Firms of Indonesia: Does Corporate Governance Matter?
The prime objective of the current research is to investigate the impact of corporate governance on the corporate CCHs in the manufacturing sector. The study has employed the panel data methodologyExpand


How Do Family Ownership, Control, and Management Affect Firm Value?
Using proxy data on all Fortune 500 firms during 1994-2000, we establish that, in order to understand whether and when family firms are more or less valuable than nonfamily firms, one mustExpand
Opting for a Controlled-Firm Majority Independent Directors Exemption to NYSE or NASDAQ Listing Requirements: Much Ado about Nothing?
The behavior of controlled-firms that opt out of the requirement that the majority of their Board members be independent is contrasted against controlled-firms who conformed to requirement in the tenExpand
Firm Performance and Mechanisms to Control Agency Problems between Managers and Shareholders
This paper examines the use of seven mechanisms to control agency problems between managers and shareholders. These mechanisms are: shareholdings of insiders, institutions, and large blockholders;Expand
Higher market valuation of companies with a small board of directors
I present evidence consistent with theories that small boards of directors are more effective, Using Tobin’s Q as an approximation of market valuation, I find an inverse association between boardExpand
Boards: Does One Size Fit All?
This paper re-examines (1) the relation between firm value and board structure and (2) the factors associated with cross-sectional variation in board structure. Conventional wisdom and existingExpand
Corporate Ownership Structure and the Informativeness of Accounting Earnings in East Asia
This paper hypothesizes that the threat of expropriation by controlling owners in East Asian corporations lowers the credibility of accounting earnings and hence the stock price informativeness ofExpand
Agency Problems at Dual-Class Companies
Using a sample of U.S. dual-class companies, we examine how divergence between insider voting and cash flow rights affects managerial extraction of private benefits of control. We find that as thisExpand
Ownership Structure and the Cost of Corporate Borrowing
This article identifies an important channel through which excess control rights affect firm value. Using a new, hand-collected data set on corporate ownership and control of 3,468 firms in 22Expand
Owner as Manager, Extended Horizons and the Family Firm
Previous work on firm ownership structure suggests that organizations in which ownership and control are combined may be undervalued relative to the market investment rule because decision makersExpand
Theory of the Firm: Managerial Behavior, Agency Costs and Ownership Structure
This paper integrates elements from the theory of agency, the theory of property rights and the theory of finance to develop a theory of the ownership structure of the firm. We define the concept ofExpand