Corporate governance, competition, and performance

Journal of Law and Society

Volumn 24, Issue 1, 1997, Pages 152-176

  Mayer, Colin ^a  

^a UNIVERSITY OF OXFORD   (United Kingdom)

Author keywords

[No Author keywords available]

Indexed keywords

EID: 0031498388     PISSN: 0263323X     EISSN: None     Source Type: Journal    
DOI: 10.1111/1467-6478.00041     Document Type: Article

References (90)

1. See C. Mayer, 'New issues in corporate finance' (1988) 32 European Economic Rev. 1167, and M. Petersen, and R. Rajan, 'The effect of credit market competition on lending relationships' (1988) 110 Q. J. of Economics 407.
2. See C. Mayer, 'New issues in corporate finance' (1988) 32 European Economic Rev. 1167, and M. Petersen, and R. Rajan, 'The effect of credit market competition on lending relationships' (1988) 110 Q. J. of Economics 407.
3. M. Aoki, 'The Japanese firm as a system of attributes: A survey and research agenda' (1994a) in The Japanese Firm: Sources of Competitive Strength, eds. M. Aoki and R. Dore (1994).
4. M. Aoki, 'The Gains from Organizational Diversity: An Evolutionary Game Parable' (1994b) in Trends in Business Organization: Do Participation and Cooperation Increase Competitiveness, ed. H. Siebert (1994) at 19.
5. A. Demb and F.F. Neubauer, The Corporate Board: Confronting the Paradoxes (1992).
6. W.C. Kester, 'Industrial Groups as Systems of Contractual Governance' (1992) 8(3) Oxford Rev. of Economic Policy 24.
7. It should be noted that there are a number of alternative definitions of insider and outsider systems. Inside ownership is sometimes used to refer to ownership by directors of firms to distinguish it from outside ownership by non-directors. In some cases, insider systems relate to the direct exercise of monitoring and control by investors (individual or institutional) as against external mechanisms such as takeovers. See J. Franks and C. Mayer 'Ownership and control' in Trends in Business Organization: Do Participation and Cooperation Increase Competitiveness?, ed. H. Siebert (1995).
8. For an interesting account of the financial mistakes which occurred in the Metallgesellschaft case, see A. Mello, and J. Parsons, 'Maturity structure of a hedge matters: Lessons from the Metallgesellschaft debacle' (1994), mimeo.
9. See K. J. Murphy, 'Corporate Performance and Managerial Remuneration: An Empirical Analysis', (1985) 7(1-3) J. of Accounting and Economics 11, and the United States survey by S. Rosen, 'Contracts and the market for executives' in Contract Economics, ed. L. Werin and H. Wijkander (1992) 181. See, for the United Kingdom, M. Conyon, P. Gregg, and S. Machin, 'Taking care of business: Executive compensation in the United Kingdom' (1995) 105 Economic J. 704.
10. See K. J. Murphy, 'Corporate Performance and Managerial Remuneration: An Empirical Analysis', (1985) 7(1-3) J. of Accounting and Economics 11, and the United States survey by S. Rosen, 'Contracts and the market for executives' in Contract Economics, ed. L. Werin and H. Wijkander (1992) 181. See, for the United Kingdom, M. Conyon, P. Gregg, and S. Machin, 'Taking care of business: Executive compensation in the United Kingdom' (1995) 105 Economic J. 704.
11. See K. J. Murphy, 'Corporate Performance and Managerial Remuneration: An Empirical Analysis', (1985) 7(1-3) J. of Accounting and Economics 11, and the United States survey by S. Rosen, 'Contracts and the market for executives' in Contract Economics, ed. L. Werin and H. Wijkander (1992) 181. See, for the United Kingdom, M. Conyon, P. Gregg, and S. Machin, 'Taking care of business: Executive compensation in the United Kingdom' (1995) 105 Economic J. 704.
12. M. Jensen, and K. Murphy, 'Performance pay and top-management incentives' (1990) 98 J. of Political Economy 225.
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15. B. Main, 'The governance of remuneration for senior executives' (1995) mimeo, University of Edinburgh.
16. D. Yermack, 'Good timing: CEO stock option awards and company news announcements' (1995) manuscript, New York University.
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19. See, for example, A. Blinder, 'Profit maximization and international competition' in Finance and the International Economy 5: The AMEX Bank Rev. Prize Essays: In Memory of Robert Marjolin, ed. R. O'Brien (1991).
20. P. Milgrom, and J. Roberts, Economics, Organization and Management (1992) at 443.
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22. J. Grundfest, 'Subordination of American capital' (1990) 27 J. of Financial Economics 89.
23. See T. Hoshi, A. Kashyap, and D. Scharfstein, 'The role of banks in reducing the costs of financial distress in Japan' (1990) 27 J. of Financial Economics 67 and see, also, T. Hoshi, A. Kashyap, and D. Scharfstein, 'Corporate structure, liquidity, and investment: « Evidence from Japanese industrial groups' (1991) 106 Q. J. of Economics, 33.
24. See T. Hoshi, A. Kashyap, and D. Scharfstein, 'The role of banks in reducing the costs of financial distress in Japan' (1990) 27 J. of Financial Economics 67 and see, also, T. Hoshi, A. Kashyap, and D. Scharfstein, 'Corporate structure, liquidity, and investment: « Evidence from Japanese industrial groups' (1991) 106 Q. J. of Economics, 33.
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28. A. Coughlan and R. Schmidt, 'Executive compensation, managerial turnover and firm performance' (1985) 7 J. of Accounting and Economics, 43; J. Warner, R. Watts, and K. Wruck, 'Stock prices, event prediction and event studies: An examination of top management restructurings' (1988) 20 J. of Financial Economics 461-92.
29. M. Weisbach, 'Outside directors and CEO turnover' (1988) 20 J. of Financial Economics 431.
30. E. Fama, 'Agency problems and the theory of the firm' (1980) 88 J. of Political Economy 288, at 293-4.
31. A. Cadbury, Report of the Committee on the Financial Aspects of Corporate Governance (1992).
32. Weisbach, op. cit., n. 24, at p. 458; Cosh and Hughes report that in the United Kingdom, boards are dominated by insiders who have spent the bulk of their career in the same firm. Non-executive directors are often retired executives of the same firm. See A. Cosh and A. Hughes, 'The Anatomy of Corporate Control: Directors, Shareholders and Executive Remuneration' (1987) 11 Cambridge J. of Economics 285.
33. Weisbach, op. cit., n. 24, at p. 458; Cosh and Hughes report that in the United Kingdom, boards are dominated by insiders who have spent the bulk of their career in the same firm. Non-executive directors are often retired executives of the same firm. See A. Cosh and A. Hughes, 'The Anatomy of Corporate Control: Directors, Shareholders and Executive Remuneration' (1987) 11 Cambridge J. of Economics 285.
34. J. Franks, C. Mayer, and L. Renneboog, 'The role of large share stakes in poorly performing companies' (1995) mimeo, 1.
35. A.A. Berle and G.C. Means, The Modern Corporation and Private Property (1932).
36. B. Black, and J. Coffee, 'Hail Britannia?: Institutional investor behaviour under limited regulation' (1993) mimeo.
37. A. Shleifer and R. Vishny, 'Large shareholders and corporate control' (1986) 94 J. of Political Economy 461.
38. Franks, Mayer, and Renneboog, op. cit., n. 28, at p. 1.
39. R. Morck, A. Shleifer, and R. Vishny, 'Management ownership and market valuation: An empirical analysis' (1988) 20 J. of Financial Economics, 293.
40. J. McConnell and H. Servaes, 'Additional evidence on equity ownership and corporate value' (1990) 27 J. of Financial Economics 595.
41. K. Wruck, 'Equity ownership concentration and firm value' (1989) 23 J. of Financial Economics 3.
42. A. Shleifer and R. Vishny, 'A survey of corporate governance', National Bureau of Economic Research working paper no. 5554 (1996) 31.
43. Franks, Mayer, and Renneboog, op. cit., n. 28.
44. B. Hermalin and M. Weisbach, 'The effects of board composition and direct incentives on firm performance' (1991) Winter, Financial Management 101.
45. J. Franks and C. Mayer, 'Ownership, control and the performance of German corporations' (1995a) mimeo, 18.
46. M. Burkhart, D. Gromb, and F. Panunzi, 'Large shareholders, monitoring and the value of the firm' (1996) mimeo.
47. Franks, Mayer, and Renneboog, op. cit., n. 28.
48. Franks and Mayer, op. cit., n. 6.
49. See, also, S. Deakin and G. Slinger, 'Hostile Takeovers, Corporate Law, and the Theory of the Firm', 124-151 above.
50. H. Manne, 'Mergers and the market for corporate control' (1965) 73 J. of Political Economy 110.
51. L. Herzel and R. Shepro, Bidders and Targets: Mergers and Acquisitions in the U.S. (1990) 3.
52. J. Franks and C. Mayer, 'Hostile takeovers and the correction of managerial failure' (1996) 40 J. of Financial Economics 163, at 164. It might be argued that the threat of a takeover might act as a disciplinary device even in the absence of poor performance on the part of targets. However, strong performance is not then necessarily the best defence against a takeover threat.
53. D. Diamond, 'Financial intermediation and delegated monitoring' (1984) 51 Rev. of Economic Studies, 393.
54. Mayer, op. cit., n. 1.
55. S. Sharpe, 'Asymmetric information, bank lending and implicit contracts: A stylized model of customer relationships' (1990) 45 J. of Finance 1069.
56. E. von Thadden, 'Long-term contracts, short-term investment and monitoring' (1995) 62 Rev. of Economic Studies 557.
57. id.
58. Sharpe, op. cit., n. 49.
59. J. Bulow and J. Shoven, 'The bankruptcy decision' (1978) 9 Bell J. of Economics 437.
60. M. White, 'Public policy towards bankruptcy: Me-first and other priority rules' (1980) 11 Bell J. of Economics 550.
61. R. Gertner and D. Scharfstein, 'A theory of workouts and the effects of reorganization law' (1980) 46 J. of Finance 1189.
62. Hoshi, Kashyap, and Scharfstein, op. cit., n. 20.
63. H. Miyama, 'Bank centred corporate groups and investment: Evidence from the first phase of high growth era in Japan' (1995) mimeo.
64. J. Edwards and K. Fischer, Banks, Finance and Investment in Germany (1994) at 175.
65. G. Gorton and F. Schmid, 'Universal banking and the performance of German firms' (1994) mimeo.
66. J. Corbett, 'International Perspectives on Financing: Evidence from Japan' (1987) 3(4) Oxford Rev. of Economic Policy 30.
67. Edwards and Fischer, op. cit., n. 58, at p. 176.
68. A. Cosh and A. Hughes, 'Executive remuneration, executive dismissal and institutional shareholdings' (1997) International J. of Industrial Organization (forthcoming).
69. A. Cosh, A. Hughes, K. Lee, and A. Singh, 'Institutional Investors, Mergers and the Market for Corporate Control' (1989) 7 International J. of Industrial Organization 73.
70. M. Roe, Strong Managers, Weak Owners: The Political Roots of American Corporate Finance (1994) 224.
71. G.P. Stapledon, Institutional Shareholders and Corporate Governance (1996).
72. C. Mayer, 'Financial systems, corporate finance and economic development' in Asymmetric Information, Corporate Finance and Investment, ed. R.G. Hubbard (1990).
73. R. McCauley and S. Zimmer 'Explaining international differences in the cost of capital' (1989) 14 Federal Reserve Bank of New York Q. Rev. 7; R. McCauley and S. Zimmer 'Exchange rates and international differences in the cost of capital' in Exchange Rates and Corporate Performance, eds. Y. Ahimred and R. Levich (1994).
74. R. McCauley and S. Zimmer 'Explaining international differences in the cost of capital' (1989) 14 Federal Reserve Bank of New York Q. Rev. 7; R. McCauley and S. Zimmer 'Exchange rates and international differences in the cost of capital' in Exchange Rates and Corporate Performance, eds. Y. Ahimred and R. Levich (1994).
75. J. Poterba and L. Summers, 'Time horizons and hurdle rates of American firms' (1996) Sloan Management Rev.
76. C. Mayer and I. Alexander, 'Banks and securities markets: Corporate financing in Germany and the United Kingdom' (1990) 4 J. of the Japanese and International Economies 450.
77. C. Mayer and I. Alexander, 'Stock markets and corporate performance: A comparison of publicly listed and private companies' (1994) mimeo. Alternatively, see C. Mayer and I. Alexander, 'Stock Markets and Corporate Performance: A Comparison of Quoted and Unquoted Companies', Centre for Economic Policy Research discussion paper (1991) 571.
78. C. Mayer and I. Alexander, 'Stock markets and corporate performance: A comparison of publicly listed and private companies' (1994) mimeo. Alternatively, see C. Mayer and I. Alexander, 'Stock Markets and Corporate Performance: A Comparison of Quoted and Unquoted Companies', Centre for Economic Policy Research discussion paper (1991) 571.
79. See Edwards and Fischer, op. cit., n. 58.
80. See, for example, O. Hart and J. Moore, 'A theory of debt based on the inalienability of human capital' (1994) 109 Q. J. of Economics 840.
81. Franks and Mayer, op. cit., n. 6.
82. Franks and Mayer, op. cit., n. 39.
83. id.
84. Frank and Mayer, op. cit., n. 6.
85. O. Williamson, Markets and Hierarchies: Analysis and Antitrust Implications (1975).
86. Mayer, op. cit., n. 1.
87. Petersen and Rajan, op. cit., n. 1.
88. M. Hellwig, 'Banking, financial intermediation and corporate finance' in European Financial Integration, ed. A. Giovannini and C. Mayer (1991).
89. von Thadden, op. cit., n. 50.
90. C. Mayer, 'Money and banking: Theory and evidence' (1994) 10 Oxford Rev. of Economic Policy 1.