Institutional investment, mergers and the market for corporate control

The increasing importance of institutional investors as shareholders in individual companies has led to an important debate on their impact on corporate performance. In this paper we focus on their role in the market for corporate control. This has so far been the subject of very little systematic investigation, despite its theoretical and practical significance. We consider the impact of financial institutions using two U.K. merger samples, and employing both univariate and multivariate techniques of analysis. In the first sample drawn from the low merger period 1981–1983 pre- and post-merger differences are found between merging companies with, and without a significant institutional presence. However, in the takeover boom year of 1986, from which the second sample is drawn, all such distinctions become blurred

The Location of Markets, Perceived Entrepreneurial Risk, and Start-up Capital of Micro Rural Firms

It is argued that when founders of SMEs perceive the probability of a successful and lucrative venture to be greater, they are more likely to provide a greater proportion of the start-up capital. This paper provides an empirical examination of two concurrent hypotheses. Firstly, that the size of the debt or equity is affected by factors influencing perceived entrepreneurial risk. Secondly, that the location of the market for the firm’s output is a major factor reducing perceived entrepreneurial risk and increasing equity of the start-up capital. A statistical analysis based on the simultaneous tobit model is used. Results show that significant factors influencing risk perception include the size of the new business and the sector of economic activity, as well as entrepreneurial experience and the location of the markets for the firm’s output. The results highlight implications for the design and implementation of rural development policies and especially for the instruments supporting rural business creation. Copyright Springer 2005