Executive Remuneration And Firm Performance: Evidence From A Panel Of Mutual Organisations

The empirical relationship between the remuneration of: the highest paid director (HPD), mean Board remuneration (Director), and the Chairperson of the Board (Chair) and firm- level performance is examined on a panel of mutual building societies over the 1991 to 1996 period. Two measures of performance are employed: profitability and the change in total factor productivity (TFP). A strong positive relationship between profitability and pay is found for the HPD but not for the Director or Chair. The relationship between pay and TFP change is generally weak for all three measures of executive remuneration. A strong relationship between size and the executive remuneration measures is found, particularly for the Director. Although there is evidence of pay being used as a governance device, the pay-size relationship is consistent with managerial theories of the firm. Surprisingly, our results are similar to those reported for joint stock firms.Mutuals; executive remuneration; performance

The Impact of State and Foreign Ownership on Post-Transition Industrial Concentration: The Case of Polish Manufacturing

This paper reports an analysis of the determinants of the level and changes in Polish industrial concentration in the early post-transition era. The empirical evidence is based on a panel of 144 Polish manufacturing industries over the period 1989-1993. The results suggest that both state and foreign ownership have a significant impact on industry concentration and this relationship is U-shaped. Minimum efficient scale is found to be the only other factor to impact on industry concentration.Post-transition; Foreign Direct Investment; State ownership; industry concentration

Financial Liberalisation and the South Korean Financial Crisis: Some Qualitative Evidence

This paper provides a novel analysis of the South Korean financial crisis drawing on the findings of a unique survey of IMF/World Bank officials and South Korean economists. The survey reveals that over-optimism and inadequate recognition of financial risks inadvertently led to excessive risk taking by Korean financial intermediaries. It also indicates that the sources of over-optimistic assessments of East Asian economies, including Korea, were mainly to be found outside East Asia, including the IMF, the World Bank, western media and analysts. Weaknesses in risk management were the result of (i) lack of expertise in relation to handling the risks associated with capital flows, and (ii) disincentives to manage risks emanating from a relatively successful history of government provided safety nets for both industry and banking. Financial liberalisation widened risk-taking opportunities, by allowing lending to companies outside Korea. It also created additional disincentives for managing risk by intensifying competition and eroding bank franchise values. Finally, weaknesses in prudential regulation allowed bank portfolios to become much riskier, importantly in terms of maturity mis-matches between dollar-denominated assets and liabilities. The liquidity crisis, which followed the re-assessment of the South Korean economy by international lenders in late 1997, triggered a full-blown financial crisis because of the absence of an effective international lender of last resort.Financial liberalisation; financial crisis; over-optimism; moral hazard

A New Era for the International Journal of the Economics of Business

For over 25 years, the International Journal of the Economics of Business published path-breaking research that uses economics methods to understand business. The success of the Journal is in large part due to the initiative and hard work of the founding Editor, Eleanor J. Morgan. We would like to take this opportunity to say a big thank you to Eleanor on behalf of the business economics community ..

Do Stock Markets Value Firm-Level Technical Efficiency? Some UK Evidence

An empirical model determining the relationship between changes in firm-level productivity and changes in firm value is estimated using an unbalanced panel of 706 public limited companies observed over the period 1996-2002. The main findings are: (1) changes in technical efficiency and labour productivity are reflected in changes in the value of manufacturing firms, and (2) changes in earnings per share and return on capital employed explain changes in the value of service sector firms but technical efficiency and labour productivity do not. For manufacturing firms, the evidence is consistent with the stock market valuing the adoption of better management practices that lead to better resource utilisation.Firm value; resource utilisation

The wage and employment consequences of ownership change

This paper provides a comparative examination of the consequences of leveraged buyouts (LBOs) and corporate takeovers on employment growth and wage growth. Employing both difference-in-differences combined with propensity score matching and the control function approach, we find evidence that (i) wages remain unchanged after either a private equity (PE)-backed or non-PE-backed LBO, (ii) wages remain unchanged after an unrelated takeover and (iii) related takeovers have negative employment consequences, possibly because of rationalisation. Our evidence does not find strong support for intervention in the market for corporate control on the grounds of protecting employees' welfare

Full and partial privatization in China:the labor consequences

This paper is the first paper to present findings evaluating the consequences for employees of full and partial privatization using difference-in-differences combined with propensity score matching. We find: (1) partial privatization causes job creation in contrast to full privatization, which destroys jobs, (2) full privatization causes higher labor productivity improvement than partial privatization, (3) wage increases occur only in partially privatized firms and (4) there are small increases in labor quality investment in both cases. The results suggest partial privatization exploits market discipline to induce labor productivity whilst simultaneously providing welfare improvements for labor. This is the ‘win-win’ outcome predicted by the ‘helping hand’ theory of government. Our results suggest that governments are likely to gain wider support for a program of partial privatization rather than full privatization

Private equity: where we have been and the road ahead

© 2019 Informa UK Limited, trading as Taylor & Francis Group. We provide an overview of the systematic evidence relating to the impact of private equity (PE) backed buyouts over the last two decades. We focus on performance; employment and employee relations; innovation, investment and entrepreneurship; longevity and survival. We also explore a future research agenda in the context of a maturing PE industry

Brexit is changing the scenario for private equity in the UK

There are both threats and opportunities for private equity firms and their portfolio companies, write Mike Wright, Kevin Amess, Nick Bacon, John Gilligan and Nick Wilso

Brexit, private equity and management

We analyse the expected impact of Brexit on private equity and its implications for management research. Specifically, we explore the implications for PE funds and funding, and at the portfolio firm level with respect to employment and performance