Large Shareholders and Corporate Policies

We develop an empirical framework that allows us to analyze the effects of heterogeneity across large shareholders, using a new blockholder-firm panel data set in which we can track all unique blockholders among large public U.S. firms. We find statistically significant and economically important blockholder fixed effects in investment, financial, and executive compensation policies. This evidence suggests that blockholders vary in their beliefs, skills, or preferences. Different large shareholders have distinct investment and governance styles: they differ in their approaches to corporate investment and growth, their appetite for financial leverage, and their attitudes towards CEO pay. We also find blockholder fixed effects in firm performance measures, and differences in style are systematically related to firm performance differences. Our results are consistent with influence for activist, pension fund, corporate, individual, and private equity blockholders, hut consistent with systematic selection for mutual funds. Finally, we analyze sources of the heterogeneity, and find that blockholders with larger block size, board membership, or direct management involvement as officers are associated with larger effects on corporate policies and firm performance.Large shareholders; blockholders; corporate policies; firm performance

Estimating the Effects of Large Shareholders Using a Geographic Instrument

Large shareholders may play an important role for firm policies and performance, but identifying an effect empirically presents a challenge due to the endogeneity of ownership structures. However, unlike other blockholders, individuals tend to hold blocks in corporations that are located close to where they live. Using this fact, we create an instrument – the density of wealthy individuals near a firm’s headquarters – for the presence of a large, non-managerial individual shareholder in a public firm. We show that these shareholders have a large impact on firms. Consistent with theories of large shareholders as monitors, we find that they increase firm profitability, increase dividends, reduce corporate cash holdings, and reduce executive compensation. Consistent with the view that there exist conflicts between large and small owners in public firms, we uncover evidence of substitution toward less tax-efficient forms of distribution (dividends over repurchases). In addition, our analysis shows that large shareholders reduce the liquidity of the firm’s stock.Large shareholders; blockholders; corporate policies; firm performance; liquidity; instrumental variable estimation

Estimating the Effects of Large Shareholders Using a Geographic Instrument

Large shareholders may play an important role for firm performance and policies, but identifying this empirically presents a challenge due to the endogeneity of ownership structures. We develop and test an empirical framework which allows us to separate selection from treatment effects of large shareholders. Individual blockholders tend to hold blocks in public firms located close to where they reside. Using this empirical observation, we develop an instrument - the density of wealthy individuals near a firm's headquarters - for the presence of large, non-managerial individual shareholders in firms. These shareholders have a large impact on firms, controlling for selection effects.

Does Corporate Culture Matter for Firm Policies?

Economic theories suggest that a firm's corporate culture matters for its policy choices. We construct a parent-spinoff firm panel dataset that allows us to identify culture effects in firm policies from behavior that is inherited by a spinoff firm from its parent after the firms split up. We find positive and significant relations between spinoff firms' and their parents' choices of investment, financial, and operational policies. Consistent with predictions from economic theories of corporate culture, we find that the culture effects are long-term and stronger for internally grown business units and older firms. Our evidence also suggests that firms preserve their cultures by selecting managers who fit into their cultures. Finally, we find a strong relation between spinoff firms' and their parents' profitability, suggesting that corporate culture ultimately also affects economic performance. These results are robust to a series of robustness checks, and cannot be explained by alternatives such as governance or product market links. The contribution of this paper is to introduce the notion of corporate culture in a formal empirical analysis of firm policies and performance.Economics of corporate culture; firm policies; firm performance

Academic Freedom in Teacher Education; Between Certainty and Uncertainty

In this study, academic freedom in teacher education is related to preservice teachers’ possibilities to develop critical and autonomous thinking in teaching practice. Self-awareness and self-confidence provide certainty to deal with the uncertain situation in teaching where creativity and judgment must be given priority over an instrumental teaching based on authorities, effective methods or ready-made solutions. Teacher educators thus need to promote academic freedom as both certainty and uncertainty. The aim of this paper is to provide enhanced understanding of the meanings and implications for teacher education of academic freedom, in the tension between certainty and uncertainty, based on a phenomenological study about preservice teachers’ experiences of professional ethics. The results show that teacher educators’ function as role models is crucial for preservice teachers’ academic freedom in developing their teaching. A consensus on fundamental values provides openness in discussions that promote the student\u27s critical attitude

What Does CEOs’ Personal Leverage Tell Us About Corporate Leverage?

We find that firms behave remarkably similarly to how their CEOs behave personally when it comes to leverage choices. We start our analysis by compiling a comprehensive sample of home purchases and financings among S&P 1,500 CEOs. Debt financing in a CEO’s most recent home purchase is used as a revealed preference of the CEO’s personal attitude towards debt. We find a robust positive relation between personal and corporate leverage. We also find that firms tend to hire CEOs with a similar personal attitude towards debt as the previous CEO. When the new and previous CEOs have different personal preferences, corporate leverage changes in the direction of the new CEO’s personal leverage. These results support a model with endogenous matching of CEOs to firms. We also find that the positive relation between CEOs’ personal leverage and corporate leverage is stronger in firms with poor governance, suggesting that CEOs imprint their personal preferences on the firms they manage when they are able to do so. These results suggest that heterogeneity in CEOs’ personal attitudes towards debt partly explains differences in corporate capital structures, and suggest more generally that an analysis of CEOs’ personalities and personal traits may provide important information about the financial policies of the firms they manage.Corporate leverage; personal leverage; CEO characteristics

En prissättningsmodell och försäljningsguide för webbapplikationen Sigma

Det är vanligt att det sker misstag i samband med läkemedelsdosering på sjukhusavdelningar. Dosering av läkemedel hör till de mest riskfyllda uppgifterna en sjukvårdare utför. På basen av detta har ett projekt tagit form som hade som målsättning att förbättra säkerheten och inlärningen av läkemedelsräkning. Detta hjälpmedel som framställts var webbapplikationen Sigma. Marknadsförings arbetet utfördes som ett projekt och omfattade två delar. I den första delen skulle skribenten tillverka försäljningsmaterial i form av en demo och i den andra delen skulle skribenten skriva en försäljningsguide som behandlade hur webbapplikationen kunde säljas. I båda delarna i marknadsföringsarbetet insamlades teori och på basen av informationen utvecklades försäljningsverktyget och försäljningsguiden. Resultatet för marknadsförings arbetet var ett försäljningsverktyg samt en försäljningsguide som bör fungera som en modell för den person som kommer att fortsätta med projektet Sigma. Den ekonomiska delen av arbetet består av en prissättningsmodell för webbapplikationen Sigma. Kostnaderna för webbapplikationen undersökte uppdragstagaren genom kvalitativ undersökning och undersökte även de potentiella kundernas antal. Uppdragstagaren undersökte vilken produktkalkyl skulle lämpa sig bäst för just detta fall genom att insamla teori. Resultatet var en modell för att prissätta Sigma webbapplikationen i form av en divisionskalkyl.It is not unusual that errors occur within the administration of drugs on hospital wards. Dosages of drugs are among the most dangerous tasks a nurse performs. Based on this, a project has taken shape which has had as its objective to improve safety and learning of pharmaceutical calculation. This produced tool was a web application called Sigma. The marketing study was made as a project and it was divided into two parts. In the first part, the author produced sales material in form of a demo and in the second part the author wrote a sales guide that addressed how the web application could be sold. In both of the marketing parts, theory was collected and on basis on this information the marketing tool and sales guide was developed. The result of the marketing project was a marketing tool and a sales guide that will act as a model for the person who will continue with the project Sigma. The economic part of this work is a pricing model for the web application Sigma. The second author collected information about all the costs of Sigma through a qualitative research and collected information also about the approximated number of the potential customers of Sigma. The author collected data about product calculations to decide which one suits best for this case in particular. The result was a model for pricing the web application Sigma in form of an absorption costing

Do Entrenched Manager Pay Their Workers More?

We present evidence on whether managerial entrenchment affects workers' pay, using a large panel dataset that matches public firms with detailed data on their subsidiaries and workers. We find that CEOs with a stronger grip on control pay their workers higher wages, but CEO ownership of cash flow rights mitigates such behavior. Unionized workers and executives are found to get a larger share of the higher pay. These findings do not seem to be driven by productivity differences or reverse causality, and are robust to a series of robustness checks. Our evidence is consistent with an agency model in which entrenched managers pay higher wages because they come with direct private benefits for the manager, such as lower-effort wage bargaining and better CEO-employee relations, and suggests more broadly an important link between the corporate governance of large public firms and labor market outcomes.Corporate governance; agency problems; private benefits; matched employer-employee data; wages

Macro-quantitative vs. macro-qualitative methods in the social sciences: an example from empirical democratic theory employing new software

'Es gibt einige neue Versuche, die Kluft zwischen quantitativen und qualitativen Methoden in den Sozialwissenschaften zu überbrücken (vgl. auch Berg-Schlosser & Quenter 1996). Dieser Beitrag illustriert und testet einerseits ausschließlich einige dieser Methoden wie etwa Regressions-, Cluster- oder Diskriminanzanalyse und andererseits neuere Fall- und Diversität-orientierte Methoden wie QCA, MultiValue QCA (MVQCA) und Fuzzy-Set QCA (fs/ QCA). Dazu werden Daten genutzt, um Lipsets Theorie der sozio-ökonomischen 'Anforderungen' von Demokratie auf der Basis von 18 Fällen in Europa in der Zeit zwischen den Kriegen zu testen. Dadurch werden die spezifischen Stärken und Schwächen der jeweiligen Methoden gezeigt.' (Autorenreferat)'There are some new attempts to bridge the divide between quantitative and qualitative methods in the social sciences (see also Berg-Schlosser & Quenter 1996). This paper explicitly illustrates and tests some of these methods like regression, cluster, or discriminant analysis, on the one hand, and more recent case- and diversity-oriented methods like QCA, Multi-Value QCA (MVQCA), and Fuzzy-Set QCA (fs/ QCA) on the other. This is done by using data to test Lipset's theory of socio-economic 'requisites' of democracy on the basis of 18 cases in Europe in the interwar period. In this way, the specific strengths and weaknesses of the respective methods are demonstrated.' (author's abstract