Managerial incentives and strategic choices of firms with different ownership structures

Banerjee, Shantanu and Homroy, Swarnodeep (2018) Managerial incentives and strategic choices of firms with different ownership structures. Journal of Corporate Finance, 48. pp. 314-330. ISSN 0929-1199

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Abstract

We examine how ownership structure affects managerial incentive alignment mechanisms and strategic objectives. We compare large Indian firms with dispersed equity ownership with business-group affiliates operating within the same institutional frameworks. We find that the performance sensitivity of CEO pay and turnover differ significantly across group affiliates and stand-alone firms. The strategic choices of firms also differ in response to managerial incentives. However, we find that, regardless of those differences, firm performance is similar for both types of firms. Overall, this paper suggests that ownership structure and managerial incentives can adjust to optimize strategic choices and firm performance.

Item Type:

Journal Article

Journal or Publication Title:

Journal of Corporate Finance

Additional Information:

This is the author’s version of a work that was accepted for publication in Journal of Corporate Finance. Changes resulting from the publishing process, such as peer review, editing, corrections, structural formatting, and other quality control mechanisms may not be reflected in this document. Changes may have been made to this work since it was submitted for publication. A definitive version was subsequently published in Journal of Corporate Finance, 48, 2017 DOI: 10.1016/j.jcorpfin.2017.10.001

Uncontrolled Keywords:

/dk/atira/pure/subjectarea/asjc/2000/2003

Subjects:

?? corporate governancecontrolling shareholdersfirm performancestrategic choicesindiafinanceeconomics and econometricsbusiness and international managementstrategy and management ??

Departments:

Lancaster University Management School > Economics
Lancaster University Management School > Accounting & Finance

ID Code:

88186

Deposited By:

ep_importer_pure

Deposited On:

13 Oct 2017 12:12

Refereed?:

Yes

Published?:

Published

Last Modified:

25 Oct 2024 00:15

URI:

https://eprints.lancs.ac.uk/id/eprint/88186