Ownership structure and operating performance: evidence from the European maritime industry

In this paper we examine the relation between ownership structure and operating performance for European maritime firms. Using a sample of 266 firm-year observations, during the period 2002–2004, we provide evidence that operating performance is positively related with foreign held shares and investment corporation held shares, indicating better investor protection from managerial opportunism. We also find no relation between operating performance and employee held shares, suggesting no relation between employee commitment and firms’ economic performance. Furthermore, we find no relation between operating performance and government held shares, indicating that government may not adequately protect shareholders’ interests from managerial opportunism. Finally, we do find a positive relation between operating performance and portfolio held shares for code law maritime firms but not for common law maritime firms. Results are robust after adjusting for various firm and country risk characteristics. Overall, our results on the importance of the ownership structure are new to this setting and add to a large body of evidence linking ownership characteristics to corporate performance.

Testing term structure estimation methods:evidence from the UK STRIPs market

Prices and yields of UK government zero-coupon bonds are used to test alternative yield curve estimation models. Zero-coupon bonds permit a more pure comparison, as the models are providing only the interpolation service and also not making estimation feasible. It is found that better yield curves estimates are obtained by fitting to the yield curve directly rather than fitting first to the discount function. A simple procedure to set the smoothness of the fitted curves is developed, and a positive relationship between oversmoothness and the fitting error is identified. A cubic spline function fitted directly to the yield curve provides the best overall balance of fitting error and smoothness, both along the yield curve and within local maturity regions.

Institutions and firm ownership structure:evidence from Central and Eastern Europe

FDI plays a key role in development, particularly in resource-constrained transition economies of Central and Eastern Europe with relatively low savings rates. Gains from technology transfer play a critical role in motivating FDI, yet potential for it may be hampered by a large technology gap between the source and host country. While the extent of this gap has traditionally been attributed to education, skills and capital intensity, recent literature has also emphasized the possible role of institutional environment in this respect. Despite tremendous interest among policy-makers and academics to understand the factors attracting FDI (Bevan and Estrin, 2000; Globerman and Shapiro, 2003) our knowledge about the effects of institutions on the location choice and ownership structure of foreign firms remains limited. This paper attempts to fill this gap in the literature by examining the link between institutions and foreign ownership structures. To the best of our knowledge, Javorcik (2004) is the only papers, which use firm-level data to analyse the role of institutional quality on an outward investor’s entry mode in transition countries. Our paper extends Javorcik (2004) in a number of ways: (a) rather than a cross-section, we use panel data for the period 1997-2006; (b) rather than a binary variable, we use the percentage foreign ownership as continuous variable; (c) we consider multi-dimensional institutional variables, such as corruption, intellectual property rights protection and government stability. We also use factor analysis to generate a composite index of institutional quality and see how stronger institutional environment could affect foreign ownership; (d) we explore how the distance between institutional environment in source and host countries affect foreign ownership in a host country. The firm-level data used includes both domestic and foreign firms for the period 1997-2006 and is drawn from ORBIS, a commercially available dataset provided by Bureau van Dijk. In order to examine the link between institutions and foreign ownership structures, we estimate four log-linear ownership equations/specifications augmented by institutional and other control variables. We find evidence that the decision of a foreign firm to either locate its subsidiary or acquire an existing domestic firm depends not only on factor cost differences but also on differences in institutional environment between the host and source countries.

From detection of complex motion to descriptions of moving surfaces in human vision

A preliminary study by Freeman et al (1996b) has suggested that when complex patterns of motion elicit impressions of 2-dimensionality, odd-item-out detection improves given targets can be differentiated on the basis of surface properties. Their results can be accounted for, it if is supposed that observers are permitted efficient access to 3-D surface descriptions but access to 2-D motion descriptions is restricted. To test the hypothesis, a standard search technique was employed, in which targets could be discussed on the basis of slant sign. In one experiment, slant impressions were induced through the summing of deformation and translation components. In a second theory were induced through the summing of shear and translation components. Neither showed any evidence of efficient access. A third experiment explored the possibility that access to these representations may have been hindered by a lack of grouping between the stimuli. Attempts to improve grouping failed to produce convincing evidence in support of life. An alternative explanation is that complex patterns of motion are simply not processed simultaneously. Psychophysical and physiological studies have, however, suggested that multiple mechanisms selective for complex motion do exist. Using a subthreshold summation technique I found evidence supporting the notion that complex motions are processed in parallel. Furthermore, in a spatial summation experiment, coherence thresholds were measured for displays containing different numbers of complex motion patches. Consistent with the idea that complex motion processing proceeds in parallel, increases in the number of motion patches were seen to decrease thresholds, both for expansion and rotation. Moreover, the rates of decrease were higher than those typically expected from probability summation, thus implying mechanisms are available, which can pool signals from spatially distinct complex motion flows.

Ownership structure and investment finance in transition economies:a survey of evidence from large firms in Hungary and Poland

Using survey data on 157 large private Hungarian and Polish companies this paper investigates links between ownership structures and CEOs’ expectations with regard to sources of finance for investment. The Bayesian estimation is used to deal with the small sample restrictions, while classical methods provide robustness checks. We found a hump-shaped relationship between ownership concentration and expectations of relying on public equity. The latter is most likely for firms where the largest investor owns between 25 percent and 49 percent of shares, just below the legal control threshold. More profitable firms rely on retained earnings for their investment finance, consistent with the ‘pecking order’ theory of financing. Finally, firms for which the largest shareholder is a domestic institutional investor are more likely to borrow from domestic banks.

Board composition, ownership structure and dividend policies in an emerging market: further evidence from CASE 50

Purpose – The purpose of this study is to examine dividend policies in an emerging capital market, in a country undergoing a transitional period. Design/methodology/approach – Using pooled cross-sectional observations from the top 50 listed Egyptian firms between 2003 and 2005, this study examines the effect of board of directors’ composition and ownership structure on dividend policies in Egypt. Findings – It is found that there is a significant positive association between institutional ownership and firm performance, and both dividend decision and payout ratio. The results confirm that firms with a higher return on equity and a higher institutional ownership distribute higher levels of dividend. No significant association was found between board composition and dividend decisions or ratios. Originality/value – This study provides additional evidence of the applicability of the signalling model in the emerging market of Egypt. It was found that despite the high institutional ownership and the closely held nature of the firms, which imply lower agency costs, the payment of higher dividend was considered necessary to attract capital during this transitional period.