The Double-Edged Sword Effects of Mechanisms Disconnecting Cash-Flow Rights From Voting Rights

Asma Fattoum, Zied Guedri

    Publikation: KonferencebidragPaperForskningpeer review

    Resumé

    On the one hand, defensive mechanisms such as dual class shares, pyramid structures and pact agreements may produce positive effects on firm performance because they enable CEOs to make long-term and risky investments without being worried by short-term market forces and risk-averse shareholders. On the other hand, defensive mechanisms may create considerable opportunities for principal-principal agency costs, discretion for private benefits expropriation and strategic myopia. This study develops a contingency framework to reconcile these two perspectives. It suggests that the nature of the effects of defensive mechanisms on firm performance depend upon CEO’s tenure, human capital and social capital. We test these hypotheses using a sample of 725 French firms over the 1995-2011 period. Our results indicate that CEO’s tenure moderates negatively the impact of defensive mechanisms on firm performance whereas CEO’s human and social capital reinforce positively the performance consequences of defensive mechanisms
    OriginalsprogEngelsk
    Publikationsdato2014
    Antal sider40
    StatusUdgivet - 2014
    BegivenhedThe Academy of Management Annual Meeting 2014: The Power of Words - Philadelphia, USA
    Varighed: 1 aug. 20145 aug. 2014
    Konferencens nummer: 74
    http://aom.org/annualmeeting/

    Konference

    KonferenceThe Academy of Management Annual Meeting 2014
    Nummer74
    LandUSA
    ByPhiladelphia
    Periode01/08/201405/08/2014
    Internetadresse

    Bibliografisk note

    CBS Bibliotek har ikke adgang til materialet

    Emneord

    • CEO dismissal
    • Human and social capital
    • Mechanisms Disconnecting Cash-Flow Rights From Voting Rights

    Citer dette

    Fattoum, A., & Guedri, Z. (2014). The Double-Edged Sword Effects of Mechanisms Disconnecting Cash-Flow Rights From Voting Rights. Afhandling præsenteret på The Academy of Management Annual Meeting 2014, Philadelphia, USA.
    Fattoum, Asma ; Guedri, Zied. / The Double-Edged Sword Effects of Mechanisms Disconnecting Cash-Flow Rights From Voting Rights. Afhandling præsenteret på The Academy of Management Annual Meeting 2014, Philadelphia, USA.40 s.
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    abstract = "On the one hand, defensive mechanisms such as dual class shares, pyramid structures and pact agreements may produce positive effects on firm performance because they enable CEOs to make long-term and risky investments without being worried by short-term market forces and risk-averse shareholders. On the other hand, defensive mechanisms may create considerable opportunities for principal-principal agency costs, discretion for private benefits expropriation and strategic myopia. This study develops a contingency framework to reconcile these two perspectives. It suggests that the nature of the effects of defensive mechanisms on firm performance depend upon CEO’s tenure, human capital and social capital. We test these hypotheses using a sample of 725 French firms over the 1995-2011 period. Our results indicate that CEO’s tenure moderates negatively the impact of defensive mechanisms on firm performance whereas CEO’s human and social capital reinforce positively the performance consequences of defensive mechanisms",
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    Fattoum, A & Guedri, Z 2014, 'The Double-Edged Sword Effects of Mechanisms Disconnecting Cash-Flow Rights From Voting Rights' Paper fremlagt ved The Academy of Management Annual Meeting 2014, Philadelphia, USA, 01/08/2014 - 05/08/2014, .

    The Double-Edged Sword Effects of Mechanisms Disconnecting Cash-Flow Rights From Voting Rights. / Fattoum, Asma; Guedri, Zied.

    2014. Afhandling præsenteret på The Academy of Management Annual Meeting 2014, Philadelphia, USA.

    Publikation: KonferencebidragPaperForskningpeer review

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    AU - Fattoum, Asma

    AU - Guedri, Zied

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    PY - 2014

    Y1 - 2014

    N2 - On the one hand, defensive mechanisms such as dual class shares, pyramid structures and pact agreements may produce positive effects on firm performance because they enable CEOs to make long-term and risky investments without being worried by short-term market forces and risk-averse shareholders. On the other hand, defensive mechanisms may create considerable opportunities for principal-principal agency costs, discretion for private benefits expropriation and strategic myopia. This study develops a contingency framework to reconcile these two perspectives. It suggests that the nature of the effects of defensive mechanisms on firm performance depend upon CEO’s tenure, human capital and social capital. We test these hypotheses using a sample of 725 French firms over the 1995-2011 period. Our results indicate that CEO’s tenure moderates negatively the impact of defensive mechanisms on firm performance whereas CEO’s human and social capital reinforce positively the performance consequences of defensive mechanisms

    AB - On the one hand, defensive mechanisms such as dual class shares, pyramid structures and pact agreements may produce positive effects on firm performance because they enable CEOs to make long-term and risky investments without being worried by short-term market forces and risk-averse shareholders. On the other hand, defensive mechanisms may create considerable opportunities for principal-principal agency costs, discretion for private benefits expropriation and strategic myopia. This study develops a contingency framework to reconcile these two perspectives. It suggests that the nature of the effects of defensive mechanisms on firm performance depend upon CEO’s tenure, human capital and social capital. We test these hypotheses using a sample of 725 French firms over the 1995-2011 period. Our results indicate that CEO’s tenure moderates negatively the impact of defensive mechanisms on firm performance whereas CEO’s human and social capital reinforce positively the performance consequences of defensive mechanisms

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    Fattoum A, Guedri Z. The Double-Edged Sword Effects of Mechanisms Disconnecting Cash-Flow Rights From Voting Rights. 2014. Afhandling præsenteret på The Academy of Management Annual Meeting 2014, Philadelphia, USA.