Essays on Incentives in Family Firms

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ISBN 13 :
Total Pages : pages
Book Rating : 4.:/5 (847 download)

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Book Synopsis Essays on Incentives in Family Firms by : Yanren Zhang

Download or read book Essays on Incentives in Family Firms written by Yanren Zhang and published by . This book was released on 2012 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: This thesis consists of one literature review and three self-contained essays that discuss management transfers, work incentives and age structures in family firms. In the literature review, I summarize and structure recent studies on management transfer in family firms. The first essay focuses on the incentive effects of age structure in a single firm, and argues that compressed age structures are negatively related to firm performance, which provides a mechanism that causes the underperformance of dynastic management. In the second essay, I extend the single-firm analysis to a multi-firm scenario and find children prefer to work for their own family if the age gap between levels is large. Otherwise, they leave and work for other families. As a result, increased life expectancy leads to the separation between ownership and management, and family-managed firms have more compressed age structures than their professionally managed counterparts. In the third and final essay, I study the issue of self-enforcement in promotion tournaments and find organizations using rank-order contracts may still act opportunistically even when there exists no agency problem between owners and managers. Furthermore, both the wage-seniority profile and governance structure determine the credibility of rank-order contracts, which provides an alternative rationale for returns to seniority and underperformance of dynastic management.

Three Essays on Corporate Governance of Family Firms

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ISBN 13 :
Total Pages : 171 pages
Book Rating : 4.:/5 (113 download)

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Book Synopsis Three Essays on Corporate Governance of Family Firms by : Tarek El Masri

Download or read book Three Essays on Corporate Governance of Family Firms written by Tarek El Masri and published by . This book was released on 2018 with total page 171 pages. Available in PDF, EPUB and Kindle. Book excerpt: This dissertation is comprised of three essays on issues related to the corporate governance of family firms. The first essay explores how owners-managers of family firms conceptualize and define their firms. Understanding the essence of a family firm helps us better understand their governance and behaviour. This essay contributes to the family business literature by presenting the seven most important criteria in identifying a family business (Handler 1989; Shanker & Astrachan 1996), namely: family ownership, control, involvement, succession, long-term vision, founders' legacy, and extended family of employees. The essay also contributes a familiness measurement tool that can be used in future research aiming at better understanding the family firm. The second essay investigates how management control technologies are calibrated in accordance with the sometimes conflicting economic and noneconomic goals resulting from the dual identities of family firms. The results show that family firms calibrate pervasive management control technologies, such as calculative, family-centric or procedural controls to strengthen the business identity and reduce the family identity of their family business. In comparison, the minimal use, or perceived absence, of management control technologies suggest that it accentuates and fosters family identity. Hence, reverting to management control technologies becomes related in a unilateral way to the business identity of the firm, despite the dual control ambition of family firms. The third essay analyzes CEO and TMT compensation practices to identify patterns that can explain the gap between family firms and the pool of external highly qualified executives. The data analysis highlights a connection between the degree of family ownership, the composition of the BOD, and the identity of the CEO. The results also show that family firms rely more heavily on cash-based awards than on equity-based awards as a form of CEO and TMT compensation. Family firms are reluctant to use option-based rewards and the use of share-based awards is also kept at a minimum. Other evidence point towards a role that institutional ownership plays in restructuring the compensation packages of the TMTs at family firms. Keywords: Family Firms, Definition of Family Firms, Family Firm Identity, Management Control Technologies, Corporate Governance, Executive Compensation.

Two Essays on Small Capitalization Public Family and Nonfamily Firms

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ISBN 13 :
Total Pages : 284 pages
Book Rating : 4.:/5 (945 download)

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Book Synopsis Two Essays on Small Capitalization Public Family and Nonfamily Firms by : Philip L. Fazio

Download or read book Two Essays on Small Capitalization Public Family and Nonfamily Firms written by Philip L. Fazio and published by . This book was released on 2012 with total page 284 pages. Available in PDF, EPUB and Kindle. Book excerpt: This research links together disparate literature on family and nonfamily firms, large and small firms, and risk for small firms. The literature is not coherent in one theme: whether family firms operate with greater risk relative to nonfamily firms. Yet the literature finds performance advantage to family firms without an explanation of why family firms on average generate better accounting returns and values relative to nonfamily firms other than for reduced agency costs translated into value. The first essay examines two measures of risk---debt ratio and idiosyncratic risk---of small publicly held family firms relative to nonfamily firms to investigate differences in financial risk between them. Using a unique hand-collected data set of small family and nonfamily firms, I analyze certain firm characteristics (family ownership, family member on the board, size, and dual class status) and find that family and nonfamily firms do not differ in their book-based debt ratios but do differ in their market-based debt ratios. Specifically, I find that family firms that tightly control voting rights through dual class status have higher debt ratios and hence have higher risk than nonfamily firms. Furthermore, I find a positive relation between idiosyncratic risk and family ownership, and I find as the percentage of family ownership increases idiosyncratic risk increases. The second essay utilizes the likelihood of incentive compensation presence and incentive compensation ratio of small publicly held family firms relative to nonfamily firms to investigate differences in CEO dividends and incentive compensation. The tools available for boards of directors to incentivize CEOs to act in accordance with diverse shareholder wishes, including risk-taking, investment selection, and the on-the-job consumption of resources, are stock options, stock grants, and cash bonuses. I argue that agency theory in practice is imperfect in incentive contracting. Specifically, CEO dividends and family ownership reduce the likelihood of the existence of an incentive compensation plan. I find in the presence of CEO dividends that family and nonfamily firms differ in their incentive compensation ratios and the likelihood of incentive compensation. In my sample, I find a significant negative relation between the CEO dividend income ratio and the incentive compensation ratio and between family ownership percentage and the incentive compensation ratio. Lastly, consistent with current literature, I find that growth opportunities positively influence both family and nonfamily firms' incentive compensation ratios.

Essays on Incentives and Firm Behavior

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ISBN 13 :
Total Pages : 306 pages
Book Rating : 4.F/5 ( download)

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Book Synopsis Essays on Incentives and Firm Behavior by : Min Jung Park

Download or read book Essays on Incentives and Firm Behavior written by Min Jung Park and published by . This book was released on 2007 with total page 306 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Essays on Incentives, Controls, and Managerial Decision Making in Organizations

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ISBN 13 :
Total Pages : 0 pages
Book Rating : 4.:/5 (144 download)

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Book Synopsis Essays on Incentives, Controls, and Managerial Decision Making in Organizations by : Anil Suresh Kshatriya

Download or read book Essays on Incentives, Controls, and Managerial Decision Making in Organizations written by Anil Suresh Kshatriya and published by . This book was released on 2024 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: "Managerial decisions in firms are influenced by the availability and precision of information. This thesis explores the internal information environment of firms through three separate investigations. Chapter 2 investigates the impact of symbolic rewards and performance transparency on managers' task assignment decisions. The study reveals that while managers' task assignment decisions are influenced by the possibility of offering symbolic rewards, they are not affected by the level of performance transparency in the firm. Chapter 3 examines the combined effect of information availability and feedback frequency on performance in a multitasking environment. The study finds that informing employees about future tasks reduces their attention and lowers their performance on current tasks. However, frequent performance feedback helps mitigate this negative effect. Chapter 4 investigates how the source of knowledge and status incentives impact managers' knowledge transfer decisions in multi-unit firms. It explores whether sourcing knowledge internally or externally influences these decisions due to psychological ownership. Contrary to the prediction, the findings show that managers do not have a stronger sense of psychological ownership for internal knowledge nor are they less willing to transfer it compared to external knowledge. However, offering status incentives, such as awards, increases managers' willingness to transfer both internal and external knowledge to other business units."--

When Business is in the Blood

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ISBN 13 :
Total Pages : 264 pages
Book Rating : 4.:/5 (798 download)

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Book Synopsis When Business is in the Blood by : Saim Kashmiri

Download or read book When Business is in the Blood written by Saim Kashmiri and published by . This book was released on 2012 with total page 264 pages. Available in PDF, EPUB and Kindle. Book excerpt: Family firms play a significant role in the U.S. economy, making up about 35 percent of S & P 500 or Fortune 500 companies and contributing about 65 percent to the U.S. GDP. This research explores differences in strategic behavior and firm performance between family firms and non-family firms, and further explores whether family firms such as Dell Inc. that use their founding family's name as part of their firm name (termed family-named firms, or FN firms) behave and perform any differently versus family firms such as Gap Inc. whose firm name does not include their family's name (termed non-family-named firms, or NFN firms). The first study which is based on a multi-industry sample of 130 publicly listed U.S. family firms over a five-year period (2002-2006), reveals that compared to NFN firms, FN firms have significantly higher levels of corporate citizenship and representation of their customers' voice (i.e., presence of a chief marketing officer) in the top management team. FN firms also have a higher strategic emphasis (i.e., a greater emphasis on value appropriation relative to value creation) compared to NFN firms. Furthermore, FN firms perform better (i.e., have a higher ROA) than NFN firms, and their superior performance is partially mediated by their higher corporate citizenship levels and strategic emphasis. In the second study -- an event study of 1294 product introduction announcements of 107 publicly listed U.S. family firms from 2005-2007 -- I find that relative to NFN firms, FN firms are rewarded more by the stock market for introducing new products. Superior returns to FN firms' new product introductions are partially mediated by these firms' history of trustworthy product-related behavior: FN firms, particularly those with corporate branding, and those wherein a founding family member holds the CEO or Chairman position, are more likely to exhibit a history of avoiding such product-related controversies as product safety issues, and deceptive advertising. The third study explores differences in strategic behavior and firm performance between family firms and non-family firms in the context of 7 U.S. economic recessions between the years 1970 and 2008. Findings based on a sample of 428 U.S. publicly listed firms reveal that family firms consistently outperform non-family firms during economic recessions. This superior performance is partially driven by family firms' unique strategic behavior: during recessions, family firms maintain higher levels of advertising intensity, exhibit lower financial leverage, and get involved in fewer social and employee-related unethical actions than non-family firms. The three studies taken together have important implications for family firm, branding, CSR, firm valuation, and innovation-related theory and practice. I highlight these implications in my dissertation.

Essays on Top Management and Corporate Behavior

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Publisher : Rozenberg Publishers
ISBN 13 : 9036101913
Total Pages : 196 pages
Book Rating : 4.0/5 (361 download)

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Book Synopsis Essays on Top Management and Corporate Behavior by : Hui-Ting Wu

Download or read book Essays on Top Management and Corporate Behavior written by Hui-Ting Wu and published by Rozenberg Publishers. This book was released on 2010 with total page 196 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Two Essays on Incentives

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ISBN 13 :
Total Pages : pages
Book Rating : 4.:/5 (313 download)

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Book Synopsis Two Essays on Incentives by : Brooke Winnifred Stanley

Download or read book Two Essays on Incentives written by Brooke Winnifred Stanley and published by . This book was released on 2008 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: I examine two sets of incentives faced by corporate CEOs to determine how they respond to those incentives. I compare firms that restate financial statements to firms that do not restate to test the hypotheses that bank monitoring should provide incentives to deter misreporting. For relatively less (more) severe misreporting, I find the likelihood of misreporting is positively related (unrelated) to bank borrowing, and that ex ante changes in bank debt are positive (unrelated) for misreporting firms versus control firms. These results suggest that bank monitoring is insufficient to deter or detect misreporting, rather that it may provide incentives for managers to engage in relatively less severe misreporting, consistent with the "debt covenant hypothesis". I next examine the incentives that CEOs have to increase firm value that result from their compensation packages and opportunities for advancement in the managerial labor market. Traditional methods for estimating pay-performance sensitivity exclude incentives that derive from opportunities for advancement in the managerial labor market and assume a linear relation between changes in pay and changes in performance. But results in recent literature imply that advancement opportunities may be a significant source of incentives and that the relation between changes in pay and changes in performance may depend upon the level of performance. I estimate payperformance sensitivities that incorporate these results. I find that although performance may be positively related to opportunities for advancement, the contribution to a CEO's total pay-performance sensitivity is too small to be economically significant. I also find that pay-performance sensitivities vary depending on the level of performance and may be higher or lower than estimates from linear models suggest. In sum, observed CEO pay packages may not be as suboptimal as some prior studies suggest.

Compensation, Favoritism, and Adverse Selection

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ISBN 13 :
Total Pages : pages
Book Rating : 4.:/5 (857 download)

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Book Synopsis Compensation, Favoritism, and Adverse Selection by : Claus Ortwin Herbertz

Download or read book Compensation, Favoritism, and Adverse Selection written by Claus Ortwin Herbertz and published by . This book was released on 2012 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:

Essays on Family Firms

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Publisher :
ISBN 13 : 9788792977106
Total Pages : 168 pages
Book Rating : 4.9/5 (771 download)

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Book Synopsis Essays on Family Firms by : Haoyong Zhou

Download or read book Essays on Family Firms written by Haoyong Zhou and published by . This book was released on 2012 with total page 168 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Essays on the Relation Between Managers' Incentives and Financial Accounting Information

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ISBN 13 :
Total Pages : 208 pages
Book Rating : 4.:/5 (59 download)

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Book Synopsis Essays on the Relation Between Managers' Incentives and Financial Accounting Information by : Yanfeng Xue

Download or read book Essays on the Relation Between Managers' Incentives and Financial Accounting Information written by Yanfeng Xue and published by . This book was released on 2004 with total page 208 pages. Available in PDF, EPUB and Kindle. Book excerpt: (Cont.) around thresholds do convey information about a firm's future performance, firms with a higher degree of information asymmetry between the management and investors are more likely to use this signaling mechanism, and the capital market recognizes the information content of the earnings management activities and rationally incorporates it in setting prices.

Essays In Executive Incentives

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ISBN 13 :
Total Pages : 128 pages
Book Rating : 4.:/5 (128 download)

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Book Synopsis Essays In Executive Incentives by : Matthew Douglas Imes

Download or read book Essays In Executive Incentives written by Matthew Douglas Imes and published by . This book was released on 2019 with total page 128 pages. Available in PDF, EPUB and Kindle. Book excerpt: My dissertation consists of three chapters which explores various aspects of executive incentives. In the first chapter, I examine the relation between executive equity pay and stock returns. By compensating CEOs and CFOs differently, shareholders can create incentive conflicts between the firms' top two managers that potentially affects shareholder wealth. On the one hand, incentive conflict potentially benefits shareholders by improving information exchange and establishing checks and balances in decisions made jointly by the CEO and CFO but alternatively, can harm shareholders by increasing risk through impeding the decision-making processes. I examine the relation between CEO-CFO incentive conflict and stock returns. The analysis indicates that an investor who routinely buy firms with the least incentive conflict and shorts firms with the greatest incentive conflict between CEO and CFOs will outperform the market by 475 basis points per year. I investigate whether risk, firm performance, or market inefficiency explain the excess returns and provide evidence that shareholders demand higher returns for bearing risk associated with CEO-CFO incentive similarities. Next, I explore the impact of executive incentives on bondholder wealth through looking at bond yields. Firms compensate managers to maximize shareholder value, yet these same incentives affect bondholder risk. I investigate the relation between executive equity pay and the cost of debt. My findings indicate a "u-shaped" relation between bond yields and equity pay. These results are consistent with the notion that bondholders prefer a moderate amount of executive equity pay and above or below that level, bondholders increase yields to protect their interests. Instrumenting equity pay using CEO heritage, I find support for a curvilinear relation. These findings suggest that moderate levels of equity pay mitigate the agency costs between firm shareholders and bondholders. Finally, I study the affect of board gender diversity on CEO and director compensation. Females occupy only about 12% of director positions on corporate boards. I find that boards with more female's onboard tend to give CEOs larger fractions of equity in their compensation packages while incentivizing directors with lower fractions of equity pay. This evidence is consistent with the notion that female board members are superior monitors yet also possess greater risk-aversion than male board members.

Long-term Orientation in Family Businesses

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ISBN 13 :
Total Pages : 102 pages
Book Rating : 4.:/5 (111 download)

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Book Synopsis Long-term Orientation in Family Businesses by : Dina L. Taylor

Download or read book Long-term Orientation in Family Businesses written by Dina L. Taylor and published by . This book was released on 2018 with total page 102 pages. Available in PDF, EPUB and Kindle. Book excerpt: Family businesses are driven by economic and noneconomic goals that tie back to the wealth of the family members and firm. Thus, more studies have shown interest in examining the long-term perspectives of family firms and the factors that contribute to their desire to achieve transgenerational wealth. A long-term orientation is a mindset of the dominant coalition of family members that changes over time. However, there is a dearth of empirical studies that have tested the antecedents and outcomes of long-term orientation (LTO) and its relevant contingencies. This dissertation examined LTO in two essays to address this gap. The purpose of Essay 1 was to examine the antecedents of LTO in family businesses through stewardship theory and agency theory. This study employed 238 shareholder letters and secondary data sources through content analysis to examine the antecedents of LTO in family firms. The findings suggested that family involvement is positively associated with LTO. Additionally, the findings suggested that CEO incentives, nonfamily CEO tenure, and CEO ownership have negative relationships with an LTO. The purpose of Essay 2 was to empirically examine the relationship between LTO and family firm performance through the resource-based view (RBV). This LTO–performance relationship is mediated by innovativeness because the LTO of the dominant coalition catalyzes to identify resources for innovation. Additionally, the relationship between LTO and innovativeness may be moderated by board governance and environmental factors because the mindset of the dominant coalition may change to adapt to these factors. This study examined 249 shareholder letters and secondary data to determine the influences that LTO has in family firms. This study predicted that LTO does have a significant influence on the dominant coalition’s decision making. As such, an LTO mindset will adapt to different governance structures in the firm, as well as to the changes in the external environment. This study proposed to show that innovativeness is positively associated with LTO and firm performance.

Essays on Incentives in Organizations

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ISBN 13 :
Total Pages : 133 pages
Book Rating : 4.:/5 (647 download)

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Book Synopsis Essays on Incentives in Organizations by : Jan Zabojnik

Download or read book Essays on Incentives in Organizations written by Jan Zabojnik and published by . This book was released on 1997 with total page 133 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Essays on Incentive Provisions

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ISBN 13 :
Total Pages : 270 pages
Book Rating : 4.:/5 (568 download)

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Book Synopsis Essays on Incentive Provisions by : Lan Shi

Download or read book Essays on Incentive Provisions written by Lan Shi and published by . This book was released on 2004 with total page 270 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Essays on Corporate Governance

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ISBN 13 :
Total Pages : 96 pages
Book Rating : 4.:/5 (128 download)

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Book Synopsis Essays on Corporate Governance by : Shuai Wang

Download or read book Essays on Corporate Governance written by Shuai Wang and published by . This book was released on 2017 with total page 96 pages. Available in PDF, EPUB and Kindle. Book excerpt: Recent literature provide widespread and robust evidence on the impact of corporate governance. Ownership structure and management characteristics are among the center of the debate. Empirical studies report conflicting evidence regarding the information environment of public family-controlled firms. We use staggered exogenous shocks to the information environment to test whether family control influences corporate disclosure. After an exogenous decrease in the information environment, we find that family firms provide greater, more informative, and more rapidly produced disclosures than their nonfamily peer firms. Family control increases the likelihood of voluntary disclosure by 190% relative to nonfamily firms after a negative information shock. These disclosure increases occur across founder-, descendant-, and externally- led family firms, suggesting families possess strong incentives to protect the firm's information environment. Beyond ownership structure, I examine the relation of CEO overconfidence on compensation incentive. My findings suggest that the cost-reduction hypothesis applies when firms offer higher incentive to overconfident CEOs to exploit their positively biased views of firm performance; risk-reduction hypothesis dominates when CEOs are extremely overconfident, where firms offer reduced compensation convexity to lower CEO's excessive risk-taking incentive. Extremely overconfident CEOs receive less convex compensation than moderately overconfident CEOs and this relation amplifies with history of value-destroying acquisition and better corporate governance.

Family Matters

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Publisher :
ISBN 13 : 9789175194950
Total Pages : 44 pages
Book Rating : 4.1/5 (949 download)

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Book Synopsis Family Matters by :

Download or read book Family Matters written by and published by . This book was released on 2013 with total page 44 pages. Available in PDF, EPUB and Kindle. Book excerpt: