This paper makes use of a database of Spanish manufacturing firms to explore the effect of a firm's ownership structure on its inventory policy. We have argued that the presence of institutional ...investors reduces a firm's liquidity needs and prevents overinvestment policies. This, in turn, leads to lower equilibrium inventory levels. Also, we expect, on average, less inventory investment when bank-equity financing is compared with bank-debt financing. Finally, other components of ownership structure like the number of blockholders prevent inventory overinvestment. This may have an impact on the economic cycle as more firms are floated on the stock market hence changing their ownership structure.
In this paper, we argue that managerial entrenchment may be positive when there is excessive external pressure from financial markets. In these situations, managers have more freedom to implement ...value-enhancing strategies, such those related to corporate social responsibility (CSR) activities. This is a good-type of entrenchment. On the other hand, when the external pressure is not so high, given that the pressure is from inside the firm, managerial entrenchment is bad and the use of CSR investments may exacerbate the agency problem. We prove this claim in an empirical study conducted of 279 international firms that operate in 22 different countries for the period 2002-2005. These firms participate in two different institutional contexts: that of the Anglo-Saxon countries, where the pressure of financial markets is intensive, or that of the Continental European countries in which the corporate control mechanisms are mainly internal.
This study investigates the connection between the duration of financial contracts and that of labour contracts. Workers with long-term contracts have incentives to invest in training. This makes ...them attractive to the entrepreneur. Furthermore, this behaviour will be reinforced if financial contracts are long-term, because it reduces the probability of an early liquidation as well as the dismissal of trained workers. As a conclusion, significant increases in the length of financing contracts should be accompanied by corresponding increases in the length of labour contracts. Support for this theoretical contention is found by testing it on a dataset composed of Spanish manufacturing firms for the period 1991–2000.
We examine empirically the relationships amongst managerial entrenchment practices, social performance, and financial performance.We hypothesize that entrenched managers may collude with ...non-shareholder stakeholders in order to reinforce their entrenchment strategy; this is particularly so in firms that have efficient internal control mechanisms. Moreover, we prove that the combination of entrenchment strategies and the implementation of socially responsible actions have particularly negative effects on financial performance. We test these contentions with a sample of 358 companies, from 22 different countries, for the period 2002–2005.
This paper builds upon the theoretical framework developed by Zahra and George Absorptive capacity: a review, reconceptualization, and extension. Academy of Management Review 2002;27:185–203 to ...empirically explore the antecedents of potential absorptive capacity (PAC), i.e. the ability to identify and assimilate external knowledge flows. Based on a sample of 2464 innovative Spanish firms, we find evidence that R&D cooperation, external knowledge acquisition and experience with knowledge search are key antecedents of a firm’s PAC. Also, during periods of important internal reshaping, when there are significant changes in strategy, design of the organization and marketing, firms exert more effort to accumulate PAC. Finally, we find that PAC is a source of competitive advantage in innovation, especially in the presence of efficient internal knowledge flows that help reduce the distance between potential and realized capacity.
This paper explores the effect of a firm’s ownership structure on its inventory policy. We have argued that the presence of institutional investors like banks as blockholders, reduces a firm’s ...liquidity needs and prevents overinvestment policies. This, in turn, leads to lower inventory levels, especially for small and/or diversified firms. Also, we expect less inventory investment when bank equity financing is compared with bank debt financing. Finally, other components of ownership structure like the number of blockholders prevent overinvestment that may generate excessive inventory accumulation. We have proved these theoretical contentions making use of a database of Spanish manufacturing firms.
Using an artiele by Garvey and Swan (GS) 1992 as a benchmark, we extend their model to deal with the issue of the optimal financial structure for a firm when the interaction between labor and ...fmancial contracts is considered. The GS artiele coneludes that debt financing is Pareto superior to equity financing. We show that once we introduce a model, with more "complete" contracts, and sorne dynamic features, their results are no longer valido
This paper studies the interaction between ownership structure, taken as a proxy for shareholders’ commitment, and customer satisfaction - the main driver of consumer loyalty - and their impact on a ...firm’s brand equity. The results show that customer satisfaction has a positive direct effect on brand equity but an indirect negative one because of reductions in ownership concentration. This latter effect emerges when managers are mainly customer-oriented. Such result gives out a warning signal that highlights the perverse effect of implementing policies, focused excessively on satisfying customers at the expense of shareholders, on a firm’s brand equity. The empirical analysis uses an incomplete panel data comprising 69 firms from 11 nations, for the period 2002-2005.
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