Open-Access for Upcoming Papers Details
Below there are titles, abstracts, key words, authors’ names and affiliations of the papers which had been accepted for publishing in Corporate Ownership and Control journal and will go published during 2007. All those authors whose papers had been accepted for publishing in the journal Corporate Ownership and Control journal are welcome to contact Dr. Alexander Kostyuk, Editor-in-Chief, at alex_kostyuk@virtusinterpress.org or alex_kostyuk@mail.ru for details of possible including detailed information about their upcoming papers at this web-site under the program “open-access to upcoming papers details”. We hope that dissemination of detailed information about upcoming papers will contribute to a free discourse between authors and readers.
INTERNAL AUDIT RISK ASSESSMENT AND LEGAL RISK: FIRST EVIDENCE IN THE ITALIAN EXPERIENCE
Angelo Miglietta, Mario Anaclerio, Cristina Bettinelli
Abstract
The objective of this article is to analyze how Italian Firms comply with the Internal Audit rules regarding the administrative liability of entities and to explain what the effect on the organizational structure was. In particular we collected data from 21 companies listed on the S&P/MIB index by sending a questionnaire to each Internal Audit Director.
We show the features of internal audit system required by the 231 Italian Decree and how risk assessment and internal audit could serve as Corporate Governance Instruments. The 231 Italian Decree, like the Sarbanes-Oxley Act enhances and extends companies’ accountability, transparency and integrity especially in business conduct. The innovativeness of this work is due to the idea of considering these elements as influential for the risk management optimization. As a consequence, a risk reduction can be achieved by improving the organizational and management models. Thought is commonly accepted that the risk optimization leads to a reduction of the cost of capital for the enterprise, there is a difficulty in estimating how much the value provided could be.
Keywords: Internal Audit, Risk Assessment, Legal Risk
DOES THE NATIONAL INTEREST MATTER? A CASE STUDY OF A CROSS-BORDER MERGER
Kim R. Sawyer*, Jackie Johnson**
Abstract
In cross-border mergers, matters of national interest often emerge. In this paper, we examine the question as to what constitutes the national interest, and whether it affects the probability of a merger receiving regulatory approval. To illustrate, we examine the takeover of the Australian resources company Western Mining Corporation.
Keywords: Cross-border mergers, legitimacy, national interest
* A/Prof Kim R. Sawyer (Corresponding author), UWA Business School (M250), The University of Western Australia, 35 Stirling Highway, Crawley, Western Australia 6009, AUSTRALIA
** A/Prof Jackie Johnson, UWA Business School (M250), The University of Western Australia
35 Stirling Highway, Crawley, Western Australia 6009, AUSTRALIA
Email: Jackie.Johnson@uwa.edu.au
OWNERSHIP STRUCTURE AND PERFORMANCE IN LARGE SPANISH COMPANIES. EMPIRICAL EVIDENCE IN THE CONTEXT OF AN ENDOGENOUS RELATION
Susana Alonso-Bonis*, Pablo de Andrés-Alonso*
Abstract
The aim of this paper is to study the relationship between ownership structure and firm value. This relationship is analyzed taking into account not only the endogenous character of ownership but also the peculiarities of the Spanish corporate system. For this purpose, we select a balanced panel of 101 companies quoted in the Madrid Exchange Market from 1991 through 1997. We have applied econometric panel data techniques (Generalized Method of Moments, GMM), which allows us to control the endogeneity problem through instruments. Our results confirm the positive effect of ownership concentration on firm market value. This relationship is robust to the inclusion of variables regarding the nature of the main shareholder, firm industry and time. Furthermore, we present some evidence about the relationship between the type of control (majority and minority) and a firm’s market value.
Keywords: Ownership Structure, Corporate Performance, Endogenous Variable, Generalized Method of Moments (GMM)
* University of Valladolid, Department of Financial Economics and Accounting, Avda. Valle del Esgueva, 6, 47011 VALLADOLID (Spain)
Tel: 34 983 423334, Fax: 34 983 423899, salonso@eco.uva.es, pandres@eco.uva.es
THE NON-LINEAR RELATIONSHIP BETWEEN MANAGERIAL OWNERSHIP AND FIRM PERFORMANCE
Damiano Bonardo, Stefano Paleari, Silvio Vismara*
Abstract
We investigate the relationship between operating performance and ownership structure using a sample of Italian IPO-firms in the period 1995-1999. Overall, we find that their performance declines after the IPO. We find evidence of a non-linear relationship between ownership and performance using different measures of operating performance and managerial ownership. This result supports the hypothesis of a combined effect of ownership on firm performance, with a positive effect at low and high levels of managerial ownership (alignment of interest hypothesis) and a negative effect at intermediate levels (entrenchment hypothesis).
Keywords: Ownership Structure, Performance, Corporate Governance, Initial Public Offerings.
* Corresponding author. Silvio Vismara, Phd. Viale Marconi, 5 - 24044 Dalmine (BG), Italy. Tel.: +39 035 2052340; fax: +39 035 562779. E-mail address: silvio.vismara@unibg.it.
VIOLATION OF CORPORATE GOVERNANCE AND COMPLIANCE PRACTICES: THE JAPANESE CASE
Michiharu Sakurai*, D. Paul Scarbrough**
Abstract
Using the Japanese situation we illustrate our contention that protection of an expanded set of stakeholders means that the research focus needs to expand from solely governance to governance and compliance. And, that the set of motivators assumed in corporate actors also needs to be expanded to include constructs other than greed or private gain.
Keywords: corporate governance, compliance, Japan
* Professor of Accounting, Senshu University, in Tokyo
e-mail: smichi@tky2.3web.ne.jp
** Associate Professor of Accounting and Finance, Faculty of Business Brock University
St. Catharines Ontario L2S 3A1
tel (office): 905-688-5550 x3915, e-mail: pscarbro@brocku.ca
EFFECTS OF UNDERDEVELOPED EQUITY MARKET ON INVESTMENT
Mark L. Muzere*
Abstract
This paper uses a variant of the Allen, Bernardo, and Welch (2000) model in an open market economy to analyze the effects of equity market development on investment. A country’s underdeveloped equity market may discourage investors from investing in the country. Consequently, an underdeveloped equity market may contribute to home equity bias. Asset prices in a less developed equity market tend to be lower. The results suggest that a government may need to facilitate the development of its equity market to attract investment.
Keywords: asset prices, deadweight costs, home equity bias
* Assistant Professor of Finance, Frank Sawyer School of Management, Suffolk University
8 Ashburton Place, Boston, MA 02108, USA
Tel: 617-573 8721; Fax: 617-305 1755, mmuzere@suffolk.edu
Stock incentive plans in Europe: empirical evidence and design implications
Alessandro Zattoni*
Abstract
Traditionally, stock incentive plans have been used by American companies for two primary purposes: as tools of corporate governance to align the interests of top managers and shareholders, and to motivate managers to maximize shareholders’ value. Recently, just as the misuse of stock option plans is the subject of scathing criticism, such plans are seeing widespread dissemination in several European countries. Empirical studies conducted by both consulting companies and management scholars outline the increasing diffusion of stock incentive plans designed by European companies and the main features of these plans. The characteristics of the process through which they are designed and of the equity incentives implemented raise the concerns of investors and academics about the ability of such plans to align managers’ interests to shareholders’. Since stock incentive plans were created and developed in the Anglo-Saxon capitalistic system, the last part of the paper reviews the reasons why firms should set up these plans. The aim is to ascertain whether European companies have good reasons to create SIPs and if the features of the incentive plans designed by these executives are consistent with achieving these goals. To answer these questions, a theoretical model is presented to provide a framework for designing stock incentive plans that are tailored to the characteristics of the company, specific aims it wishes to pursue, and the relative institutional environment.
** Management Department, Parthenope University &
Strategic and Entrepreneurial Department, SDA Bocconi School of Management, Viale Isonzo 23, 20136 Milano, alessandro.zattoni@unibocconi.it
SECRECY, COLLUSION AND COALITION BUILDING IN CORPORATE GOVERNANCE
(Lee) Mick Swartz*
Abstract
This paper studies secrecy in voting and the role of information on coalition building in corporate governance. It finds evidence that supports the coalition building hypothesis and, in part, rejects the agency cost hypothesis. The conditions for insiders and large outsiders to form coalitions are examined. The results are consistent with insiders and large outsiders cooperating and voting as a block to maintain power, this imposes costs on other shareholders. Consistent with the agency theory and the coalition building theory, management initiated amendments have a more negative impact than shareholder initiated amendments. The Vote Your Conscience theory is rejected.
** 601 N Hoffman Hall, University of Southern California, Los Angeles, CA 90089, 213-740-6527 phone, lswartz@marshall.usc.edu, mick.swartz@marshall.usc.edu
FAMILY CONTROL, AUDITOR INDEPENDENCE, AND AUDIT QUALITY: EMPIRICAL EVIDENCE FROM THE TSE-LISTED FIRMS (1999-2002)
Ching-Lung Chen*, Gili Yen**, Chung-Jen Fu***, Fu-Hsing Chang****
Abstract
The present study posits that auditors have weaker bargaining power when facing clients with ultimately controlling family members as opposed to clients without. By analyzing clients’ magnitude of discretionary accruals in company with audit reports, the present study examines empirically the influence of family-controlled clients on the audit quality. The empirical results, as expected, reveal that the magnitude of discretionary accruals of a family-controlled firm, given receiving a standard unqualified audit report, is significantly larger than a firm that has no ultimately controlling family members. Moreover, family-controlled firms with larger positive discretionary accruals, as expected, are more likely to receive a standard unqualified audit report than clients without ultimately controlling shareholders. The above empirical results suggest that the audit quality is indeed deteriorated when an auditor faces a family-controlled client.
Keywords: Family-controlled firm; Bargaining power; Auditor independence; Discretionary accruals; Audit quality
*Associate Professor & Chairman, Department of Accounting, Chaoyang University of Technology,
168 Jifeng E. Rd., Wufong Township, Taichung County 41349, Taiwan, R.O.C.
Tel：04-23323000#4415, Fax：04-23742359
E-mail: clchen@cyut.edu.tw
** Professor, Department of Business Administration, Chaoyang University of Technology, 168 Jifong E. Rd., Wufong Township, Taichung County 41349, Taiwan, R.O.C.
Tel: 886-4-23323000#4351, Fax: 886-4-23742359
E-mail: gyen@cyut.edu.tw
***Associate Professor, Department of Accounting, National Yunlin University of Science & Technology, 123 Section 3, University Road, Touliu, Yunlin County, Taiwan, R.O.C.
E-mail: fucj@yuntech.edu.tw
****Associate Professor, Department of Accounting, National Yunlin University of Science & Technology, 123 Section 3, University Road, Touliu, Yunlin County, Taiwan, R.O.C.
E-mail: fschang@yuntech.edu.tw
