In this paper, we study the history of Telecom Italia, the sixth biggest world telecommunication company for turnover, to evaluate how changes in control affected minority protection. Telecom Italia was privatized in 1997 and it has been the target of two takeovers in 1999 by Olivetti and 2001...

This paper examines the impact of market liquidity on seasoned equity offerings (SEO) characteristics in France. We find that, besides blockholders’ takeup, liquidity is an important determinant of SEO flotation method choice. We document higher direct equity offering flotation costs, but also...

Divestitures create shareholder value by helping firms to optimize their portfolio of assets. However, firms may forego value enhancing divestitures because of agency problems. More specifically, large controlling shareholders may prefer to retain the assets in order to extract private benefits...

Analyzing a large panel that matches public firms with worker-level data, we find that managerial entrenchment affects workers’ pay. CEOs with more control pay their workers more, but financial incentives through ownership of cash flow rights mitigate such behaviour. These findings do not seem...

We present evidence on whether managerial entrenchment affects workers' pay, using a large panel dataset that matches public firms with detailed data on their subsidiaries and workers. We find that CEOs with a stronger grip on control pay their workers higher wages, but CEO ownership of cash...

Despite the extensive literature on dividend policy, little is known about the relationship between controlling shareholders and the determination of dividend policy, especially in dual class companies. Three potential dividend policy hypotheses are examined. We show that dual class companies...

Debt is not frequently analyzed in relation to the conflict between controlling and outside shareholders. At the same time, debt helps to manage the type II corporate agency conflicts because it is easier for controlling shareholders to modify the leverage ratio than to modify their share of...

Debt may help to manage type II corporate agency conflicts because it is easier for controlling shareholders to modify the leverage ratio than to modify their share of capital. A sample of 112 firms listed on the French stock market over the period 1998-2009 is empirically tested. It supports an...

Debt may help to manage type II corporate agency conflicts because it is easier for controlling shareholders to modify the leverage ratio than to modify their share of capital. A sample of 112 firms listed on the French stock market over the period 1998–2009 is empirically tested. It supports...

Controlled firms are in a framework where private benefits create a buffer between public earnings and economic profitability. We focus on debt leverage in the type II agency conflict between the controlling shareholder and outside investors. We use a simple discrete model comparing the capital...