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The purpose of this study is to examine the effects of ownership structure on merger and acquisition (M&A) decisions of Brazilian listed companies.

This paper is an applied and explanatory research based on secondary data. The sample is comprises non-financial companies listed on the BM&FBovespa between 1998 and 2007. Considering that the dependent variable is binary, the authors estimate panel data logistic regression models. Considering the existence of conflicts of interest among those who have the decision-making power and the supplier of capital for M&A transactions, they draw upon the Agency Theory to develop the theoretical hypotheses.

The results show that, for a sample of Brazilian non-financial companies listed on the BM&FBovespa (B3), from 1998 to 2007, Brazilian firms present, on average, a highly concentrated ownership structure and the major controlling shareholders are families or the State. These characteristics are negatively related to the likelihood of M&A transactions, as most of these controlling shareholders are reluctant to adopt mechanisms that reduce their control.

With regard to the limitations, this study considered only the M&A definitions as stated by the Bureau van Dijk database. In this sense, future studies may analyze the effects of ownership structure based on other M&A definitions and typologies. In addition, the study is limited to the period from 1998 to 2007, which is prior to the international financial crisis. Future studies may extend the analysis period to include the post-crisis period (2008) to check if there are differences in M&A strategies before and after the crisis.

From a managerial perspective, the results show that minority shareholders have little or no influence over an M&A decision, so they cannot decide on the use of resources for fast growth and access to new markets through M&A. Thus, the investment decision must take into account the nature and the quality of the controlling shareholder.

This study shows a significant and negative effect of ownership concentration on the likelihood of M&A transactions. In part, this result demonstrates the importance of understanding the behavior of controlling shareholders before inferring on other key aspects that the M&A literature tends to make fundamental in explaining M&A decisions in publicly traded companies, particularly, in an environment of low minority shareholder protection.

Previous studies have partly found that the M&A decision is motivated by individual advantages obtained from increasing the size of the firm, or from managerial hubris. The results show that these hypotheses do not hold in the Brazilian context. Moreover, the results indicate that M&A decisions are associated with the characteristics of the controlling shareholder, their level of ownership concentration and their typology, contributing to the agency debate on whether the incentive or the entrenchment effect prevails in the context of the agency problem between controlling and minority shareholders, particularly, in an institutional environment of low shareholder protection.

This paper focuses on bank audit committees and examines whether audit committee members who are former auditors are associated with the acquisition of audit and non-audit services from their former employers.

The study empirically examines a sample of large banks that are included in the S&P Composite 1500.

The paper reports significantly lower audit fees and a higher proportion of non-audit fees to total fees when the audit committee chair is an alumnus of the incumbent audit firm. Moreover, additional analysis reveals that these findings are stronger for banks with more earnings management.

Overall, the findings indicate that audit firms might consider banks using their alumni as audit committee chairs to be less risky or easier to audit, thus requiring relatively less effort from the auditors. The reduced effort required to audit clients with audit firm alumni on their audit committees then has the effect of reducing the audit fees charged. Alternatively, their auditing experience and cognitive proximity might influence the assessment of the need for auditing or the ability to negotiate lower audit fees on the part of audit firm alumni.

This paper provides empirical evidence of the association between audit firm alumni in influential positions on an audit committee and fees paid to those audit firms in the banking industry. The findings contribute to the literature by suggesting that banks with affiliated former auditors chairing their audit committees not only have significantly lower audit fees but also a higher proportion is spent on non-audit services.

The purpose of this study is to construct the first short-term financial distress prediction model for the Spanish banking sector.

The concept of financial distress covers a range of different types of financial problems, in addition to bankruptcy, which is not common in the sector. The methodology used to predict financial problems was artificial neural networks using traditional financial variables according to the capital, assets, management, earnings, liquidity and sensibility system, as well as a series of macroeconomic variables, the impact of which has been proven in a number of studies.

The results obtained show that artificial neural networks are a highly suitable method for studying financial distress in Spanish credit institutions and for predicting all cases in which an entity has short-term financial problems.

This is the first work that tries to build a model of artificial neural networks to predict the financial distress in the Spanish banking system, grouping under the concept of financial distress, apart from bankruptcy, other financial problems that affect the viability of these entities.

It is widely believed that deviating from the “one share-one vote” principle leads to corporate inefficiencies. To measure the market appraisal of this potential inefficiency, this study aims to analyse the market reaction to a change from the “one head-one vote” to the “one share-one vote” mechanism by means of a quasi-natural experiment: a 2015 Italian reform forcing all listed cooperative banks to transform into joint-stock companies.

To investigate the market reaction around the regulatory change, this study uses both a traditional event study and a novel methodology based on the synthetic control method as well as on Bayesian statistical techniques.

This study estimates the market valuation of the effects of the governance change around the event date being equal to a cumulative average increase in market value of about 14 per cent using an event study methodology, and of about 13 per cent using Bayesian techniques.

This study provides evidence on the fact that the voting mechanism significantly affects the market values of companies. The study also introduces a novel statistical technique that can be extremely useful in analysing single-firm event studies.

The purpose of this paper is to know which growth-impeding constraints are perceived to act upon operations of small- to medium-sized (SME) companies by their owner-managers and to recommend transitionary paths to elevate constraints and increase contribution levels made by SMEs’ operations. To do so, this research has been primarily founded upon Hayes et al.’s (2005) operations contribution model for differentiating between different levels of operations’ contribution, and secondarily on the theory of constraints philosophy to explain the perceptions of constraints found at each level – current and future.

An open-ended survey and a series of group workshops have gathered new empirical data about these perceptions, which were coded using the relational content analysis to identify a parsimonious set of perceptual growth-impeding constraint categories. The most popular transitions were identified and a correlation of frequency rank orders between “perceived current” and “perceived future” constraints categories was calculated, and likely transitionary paths for growth are discussed. Three SME case studies were documented in related action research to contextualise survey findings.

The most popular transition was from “neutral” to “leading”. A lack of people capability was perceived to be the most commonly reported growth-impeding constraint category, followed by a combined lack of process competence and product and service innovation, further followed by a lack of skills in information technology automation. In addition, a new conceptual model has been generated inductively to address shortcomings found in the original operations contribution model (Hayes et al., 2005) during its application to UK SMEs. The new model is referred to in this paper as the “Operations Growth Rocket”.

This research only used data from UK SMEs.

This work should help SME owner-managers to overcome growth-impeding constraints that act upon their operations and assist them to develop more effective actions and paths to increase the contribution levels made by their operations. This in turn should support growth of their organisations. Findings will also inform teaching about more effective operations management in SMEs.

This work should help UK SMEs to grow, which in turn will strengthen the UK economy.

A novel approach and new data from 208 SMEs modify a classical operations contribution model (Hayes et al., 2005). This is achieved by considering transitionary paths to be meta-categories continua abstracted from constraint categories combined with case data for moving towards higher levels of operations contribution, rather than using discrete growth-impeding and growth-constraining “levels”. This research has inductively generated a new version of the classical contribution model that should be more suitable for stimulating growth in (UK) SMEs.

This paper aims to draw attention to a broad range of experimental institutional initiatives which operate in the absence of a global antitrust regime. The purpose of this paper is to offer food for thought to scholars in other fields of international trade law facing challenges from divergent national regimes.

Taking inspiration from political science literature on institutions, this paper crafts a broad analytical lens which captures various organisational forms (including networks), codes (including soft law) and culture (including epistemic communities). The strength and shortcomings of traditional “bricks and mortar” institutions such as the European Union (EU) and General Agreement Tariffs and Trade/World Trade Organisation are first examined. Then, the innovative global network of International Competition Network (ICN) is analysed.

It highlights the value of the global antitrust epistemic community in providing a conducive environment for extensive recourse to “soft law”. Examples from the EU and the ICN include measures which find expression in enforcement tools and networks. These initiatives can be seen as experimental responses to the challenges of divergent national antitrust regimes.

It is desktop research rather than empirical field work.

To raise awareness outside the antitrust scholarly community of the variety of experimental institutional initiatives which have evolved, often on a soft law basis, in response to the challenges experienced by national enforcement agencies and businesses operating in the absence of a global antitrust regime.

It offers some personal reflections on the ICN from the author’s experience as a non-governmental advisor. It draws attention to the ICN’s underappreciated range of educational materials which are freely available on its website to everyone. It submits that the ICN template offers interesting ideas for other fields of international trade law where a global regime is unrealisable. The ICN is a voluntary virtual network of agencies collaborating to agree ways to reduce clashes among national regimes. Its goal of voluntary convergence is portrayed as standardisation rather than as absolute congruence. Even if standardisation of norms/processes is too ambitious a goal in other fields of international trade law, the ICN model still offers inspiration as an epistemic community within an inclusive and dynamic forum for encouraging debate and creating a culture of learning opportunities where familiarity and trust is fostered.

This paper aims to demonstrate that state shareholders are confronted with contradictory logics leading to institutional contradictions that activist shareholders can exploit. The competing logics of the state as shareholder and their impact on corporate governance and shareholder activism offer fertile grounds for research advances in Coordinated Market Economies (CMEs).

Through an extensive literature review of state ownership, institutional contradictions and shareholder activism, this paper analyzes two case studies involving the French State as shareholder.

In the French context, these two cases illustrate how institutional contradictions result in opportunities for shareholder activism. By focusing on the institutional contradictions of the state shareholder, this investigation suggests a need for experimental research to observe how shareholder activists adapt to each institutional change in CMEs. This experimentation can help policymakers to avoid creating additional conditions that shareholder activists can exploit.

This focuses only on France and its state shareholdings. To generalize results, studies of other CMEs and state shareholders are needed.

Policymakers should consider all legislative proposals for their potential to deviate from corporate governance practice by experimenting with them in a laboratory setting. Shareholder activists can compare state shareholders’ actions against the state’s legislation to emphasize institutional contradictions that counter minority shareholders’ rights.

This research is the first to analyze how the state as shareholder can exploit its competing logics to resist against shareholder activism and support management or to become itself a shareholder activist.

Enterprise systems are commonly implemented by firms through outsourcing arrangements with software vendors. However, deriving benefits from these implementations has proved to be a challenge, and a great deal of variation has been observed in the extent of value generated for client and vendor firms. This research examines the role of co-specialization as a strategy to make the most out of outsourced enterprise systems. The authors develop hypotheses relating resource co-specialization with two indicators of success for implementation of enterprise software: (1) exchange success and (2) firm growth.

The hypotheses are tested using a unique panel data set of 175 firms adopting Advanced Planning and Scheduling (APS) software, a type of enterprise system used for managing manufacturing and logistics. The authors identify organizational factors that support co-specialization and then examine how co-specialization is associated with enterprise software implementation success, controlling for the endogenous choice to co-specialize.

The empirical results suggest that resource co-specialization is positively associated with implementation success and that the two resource co-specialization pathways that are examined complement each other in providing performance benefits.

This paper contributes to the research literature on outsourcing. The study also provides a new empirical test using a unique data set of 175 firms adopting APS Software.

This study aims to develop an assessment methodology using a Bayesian network (BN) to predict the failure probability of oil tanker shipping firms.

This paper proposes a bankruptcy prediction model by applying the hybrid of logistic regression and Bayesian probabilistic networks.

The proposed model shows its potential of contributing to a powerful tool to predict financial bankruptcy of shipping operators, and provides important insights to the maritime community as to what performance measures should be taken to ensure the shipping companies’ financial soundness under dynamic environments.

The model and its associated variables can be expanded to include more factors for an in-depth analysis in future when the detailed information at firm level becomes available.

The results of this study can be implemented to oil tanker shipping firms as a prediction tool for bankruptcy rate.

Incorporating quantitative statistical measurement, the application of BN in financial risk management provides advantages to develop a powerful early warning system in shipping, which has unique characteristics such as capital intensive and mobile assets, possibly leading to catastrophic consequences.

The aim of this paper is to examine the role of liquidity in asset pricing in a tiny market, such as the Portuguese. The unique setting of the Lisbon Stock Exchange with regards to changes in classification from an emerging to a developed stock market, allows an original answer to whether changes in the development of the market affect the role of liquidity in asset pricing.

The authors propose and compare two alternative implications of liquidity in asset pricing: as a desirable characteristic of stocks and as a source of systematic risk. In contrast to prior research for major stock markets, they use the proportion of zero returns which is an appropriated measure of liquidity in tiny markets and propose the separated effects of illiquidity in a capital asset pricing model framework over the whole sample period as well as in two sub-samples, depending on the change in classification of the Portuguese market, from an emerging to a developed one.

The overall results of the study show that individual illiquidity affects Portuguese stock returns. However, in contrast to previous evidence from other markets, they show that the most traded stocks (hence the most liquid stocks) exhibit larger returns. In addition, they show that the illiquidity effects on stock returns were higher and more significant in the period from January 1988 to November 1997, during which the Portuguese stock market was still an emerging market.

These findings are relevant for investors when they make their investment decisions and for market regulators because they reflect the need of improving the competitiveness of the Portuguese stock market. Additionally, these findings are a challenge for academics because they exhibit the need for providing alternative theories for tiny markets such as the Portuguese one.

The results have important implications for individual and institutional investors who can take into account the peculiar effect of liquidity in stock returns to make proper investment decision.

The Portuguese market provides a natural experimental area to analyse the role of liquidity in asset pricing, because it is a tiny market and during the period studied it changed from an emerging to a developed stock market. Moreover, the authors have to highlight that previous evidence almost exclusively focuses on the US and major European stock markets, whereas studies for the Portuguese one are scarce. In this context, the study provides an alternative methodological approach with results that differ from those theoretically expected. Thus, these findings are a challenge for academics and open a theoretical and a practical debate.