Equity Block Transfers in Transition Economies: Evidence from Poland.

This Paper investigates valuation effects of share block transfers and employs agency theory to explain the determinants of block premia. A sample of transactions from Poland is used to measure benefits and costs of ownership concentration. Block premia are found to be substantially lower than in well-developed markets, in spite of the insufficient minority shareholders' protection in transitional economies. Shareholder's opportunities to extract private benefits of control turn out to depend not only on the size of equity stake, but also on the relative power of other block holders. The expropriation threat appears to be most severe in the companies where the free float constitutes a substantial fraction of the shares outstanding. Moreover, the analysis reveals that liquidity costs considerably influence the level of block premia in Poland. Finally, the results document a positive role of the state as an institutional investor in listed companies.

Control Structures and Payout Policy

This paper examines the payout policies of UK firms listed on the London Stock Exchange during the 1990s.It complements the existing literature by analyzing the trends in both dividends and total payouts (including share repurchases).In a dynamic panel data regression setting, we relate target payout ratios to control structure variables.Profitability drives payout decisions of the UK companies, but the presence of strong block holders or block holder coalitions considerably weakens the relationship between corporate earnings and payout dynamics.While the impact of the voting power of shareholders coalitions on payout ratios is found to be always negative, the magnitude of this effect differs across different categories of block holders (i.e. industrial firms, outside individuals, directors, financial institutions).The controlling shareholders appear to trade off the agency problems of free cash flow against the risk of underinvestment, and try to enforce payout policies that optimally balance these two costs.Finally, the paper improves upon some methodological flaws of the recent empirical studies of payout policy.Payout policy;dividend payout;share repurchases;partial adjustment;ownership and control;voting power;Banzhaf power indices;corporate governance;free cash flow;pecking order

The Managerial Labor Market and the Governance Role of Shareholder Control Structures in the UK

We simultaneously analyze two mechanisms of the managerial labor market: CEO turnover and monetary remuneration schemes.Sample selection models and hazard analyses applied to a random sample of 250 firms listed on the London Stock Exchange over a six-year pre-Cadbury period show that managerial remuneration and the termination of labor contracts play an important role in mitigating agency problems between managers and shareholders.We find that both the CEO's industry-adjusted monetary compensation and their replacement are strongly performance-sensitive.Top executive turnover is shown to serve as a disciplinary mechanism for corporate underperformance, whereas the level of monetary compensation rewards good performance.We also investigate whether specific corporate governance mechanisms (different types of blockholders or of boards of directors) have an impact on managerial disciplining or on the pay-for-performance contracts.There is little evidence of outside shareholder monitoring and CEOs with strong voting power successfully resisting replacement irrespective of corporate performance.This case of strong managerial entrenchment is even exacerbated when the CEO also holds the position of chairman of the board.In firms with large outside shareholdings, CEO compensation is lower, but outside shareholder do not impose a stricter performance-related incentive remuneration scheme.When insiders have strong voting power, the CEOs remuneration is lower except when the stock price performance is poor: it seems that when the CEOs wealth resulting from their investment goes down due to decreasing stock prices, the CEOs cash compensation is higher.The presence of a remuneration committee has no impact on remuneration.Finally, we find strong support for the incentive effect-hypothesis of remuneration: CEOs with higher levels of monetary compensation attain better subsequent accounting and stock price-based measures of corporate performance.labour turnover;agency theory;labour market;managers;corporate governance;shareholders;corporate ownership

Patterns in Payout Policy and Payout Channel Choice of UK Firms in the 1990s

The paper examines the payout policy of UK firms listed on the London Stock Exchange during the 1990s.We complement the existing payout literature studies by analyzing jointly the trends in dividends and share repurchases.Unlike in the US, we find that, in the UK, firms do not demonstrate a decreasing propensity to distribute funds to shareholders.The role of share repurchases is increasing, but dividends still constitute a vast proportion of the total payout.Firms repurchasing shares usually pay dividends as well.We also document that there is a strong relationship between the presence of blockholders and the choice of the payout channel: firms with concentrated ownership tend to opt for dividends rather than share repurchases, irrespectively of the identity of the controlling shareholder.We argue that the differential taxation of dividends and capital gains as well as the insider trading regulation affect the relative attractiveness of dividends and share repurchases to large shareholders.Payout policy;dividends;share repurchases;taxes;power indices;Banzhaf index;ownership structure;corporate governance

Ownership Structure as a Mechanism of Corporate Governance.

The presence of agency conflicts between shareholders and managers who control corporate resources in modern companies has led to the emergence of governance mechanisms assuring that financiers' funds are not expropriated or wasted on unattractive projects. In a vast majority of European countries, ownership concentration is one of the most important internal mechanisms of corporate governance. While the theoretical literature stipulates that the presence of a large shareholder procures benefits, it also acknowledges the costs it involves. This dissertation investigates the role of shareholder control structures in different corporate governance regimes and tries to assess the resulting costs and benefits. Chapter 1 motivates the thesis. Chapter 2 analyzes the effects of substantial changes in the ownership structures of the Polish listed companies. Chapter 3 investigates the link between shareholder control structures and the governance efficiency of managerial labor market mechanisms in the UK. Chapter 4 examines the patterns in payout policy of UK firms in the 1990s and assesses empirically the validity of clientele theories of payout. Chapter 5 relates payout ratios to control structures for the UK firms.

Patterns in Payout Policy and Payout Channel Choice of UK Firms in the 1990s

The paper examines the payout policy of UK firms listed on the London Stock Exchange during the 1990s.We complement the existing payout literature studies by analyzing jointly the trends in dividends and share repurchases.Unlike in the US, we find that, in the UK, firms do not demonstrate a decreasing propensity to distribute funds to shareholders.The role of share repurchases is increasing, but dividends still constitute a vast proportion of the total payout.Firms repurchasing shares usually pay dividends as well.We also document that there is a strong relationship between the presence of blockholders and the choice of the payout channel: firms with concentrated ownership tend to opt for dividends rather than share repurchases, irrespectively of the identity of the controlling shareholder.We argue that the differential taxation of dividends and capital gains as well as the insider trading regulation affect the relative attractiveness of dividends and share repurchases to large shareholders.

Control Structures and Payout Policy

This paper examines the payout policies of UK firms listed on the London Stock Exchange during the 1990s.It complements the existing literature by analyzing the trends in both dividends and total payouts (including share repurchases).In a dynamic panel data regression setting, we relate target payout ratios to control structure variables.Profitability drives payout decisions of the UK companies, but the presence of strong block holders or block holder coalitions considerably weakens the relationship between corporate earnings and payout dynamics.While the impact of the voting power of shareholders coalitions on payout ratios is found to be always negative, the magnitude of this effect differs across different categories of block holders (i.e. industrial firms, outside individuals, directors, financial institutions).The controlling shareholders appear to trade off the agency problems of free cash flow against the risk of underinvestment, and try to enforce payout policies that optimally balance these two costs.Finally, the paper improves upon some methodological flaws of the recent empirical studies of payout policy.

The Critical Role of Golgi Cells in Regulating Spatio-Temporal Integration and Plasticity at the Cerebellum Input Stage

The discovery of the Golgi cell is bound to the foundation of the Neuron Doctrine. Recently, the excitable mechanisms of this inhibitory interneuron have been investigated with modern experimental and computational techniques raising renewed interest for the implications it might have for cerebellar circuit functions. Golgi cells are pacemakers with preferential response frequency and phase-reset in the theta-frequency band and can therefore impose specific temporal dynamics to granule cell responses. Moreover, through their connectivity, Golgi cells determine the spatio-temporal organization of cerebellar activity. Finally, Golgi cells, by controlling granule cell depolarization and NMDA channel unblock, regulate the induction of long-term synaptic plasticity at the mossy fiber – granule cell synapse. Thus, the Golgi cells can exert an extensive control on spatio-temporal signal organization and information storage in the granular layer playing a critical role for cerebellar computation