Identifying the effect of managerial control on firm performance

Adams, Renée and Santos, João A.C. (2006) Identifying the effect of managerial control on firm performance. Journal of Accounting and Economics, 41 (1-2). pp. 55-85.

Abstract

Using a unique sample, we attempt to identify the consequence of the separation between inside ownership and control for firm performance. We exploit the fact that banking institutions may hold their own shares in trust to construct a clean measure of the wedge between inside voting control and cash flow rights. These shares provide managers with no monetary incentives, since their dividends accrue to trust beneficiaries. However, managers may have the authority to vote these shares. Contrary to the belief that managerial control is purely detrimental, we find that it has positive effects on performance over at least some range.

Item Type: Article
Keywords: Managerial control; Voting rights; Performance measurement; Trust investments; Finance
Subject(s): Finance
Date Deposited: 02 Oct 2018 14:03
Last Modified: 02 Oct 2018 14:03
Funders: N/A
URI: http://eureka.sbs.ox.ac.uk/id/eprint/6980

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