Ownership structure, speculation, and shareholder intervention
Article Abstract:
An institution holding shares in a firm can use information about the firm both for trading ("speculation") and for deciding whether to intervene to improve firm performance. Intervention increases the value of the institution's existing shareholdings, but intervention only increases the institution's trading profits if it enhances the precision of the institution's information relative to that of uninformed traders. Thus, the ability to speculate can increase or decrease institutional intervention. We examine key factors that affect the intervention decision, the usefulness of "short-swing" provisions and restricted shares in encouraging institutional intervention, and implications for ownership structure across different firms. (Reprinted by permission of the publisher.)
Publication Name: Journal of Finance
Subject: Business
ISSN: 0022-1082
Year: 1998
User Contributions:
Comment about this article or add new information about this topic:
Covenants and collateral as incentives to monitor
Article Abstract:
Although monitoring borrowers is thought to be a major function of financial institutions, the presence of other claimants reduces an institutional lender's incentives to do this. Thus loan contracts must be structured to enhance the lender's incentives to monitor. Covenants make a loan's effective maturity, and the ability to collateralize makes a loan's effective priority, contingent on monitoring by the lender. Thus both covenants and collateral can be motivated as contractual devices that increase a lender's incentive to monitor. These results are consistent with a number of stylized facts about the use of covenants and collateral in institutional lending. (Reprinted by permission of the publisher.)
Publication Name: Journal of Finance
Subject: Business
ISSN: 0022-1082
Year: 1995
User Contributions:
Comment about this article or add new information about this topic:
Moral hazard and opimal subsidiary structure for financial institutions
Article Abstract:
Risk factors that are involved in financial institutions' loan approval processes are evaluated under ethical aspects.
Publication Name: Journal of Finance
Subject: Business
ISSN: 0022-1082
Year: 2004
User Contributions:
Comment about this article or add new information about this topic:
- Abstracts: Savings and loan ownership structure and expense-preference. A note on savings and loan ownership structure and expense preference: A re-examination
- Abstracts: Efficiency, ownership and market structure, corporate control and governance in the Turkish banking industry. A framework for market discipline in bank regulatory design
- Abstracts: Leadership styles and values chart the course for an entrepreneurial journey. The tough economy prompts companies to shift their approach to sales compensation
- Abstracts: Computer software. Modelmaking and prototyping services. Landing at a cybercafe near you: Alienware's new laptop packs the power of a desktop into a mobile graphics workstation
- Abstracts: The impact of cooperative structure and firm culture on market orientation and performance. Applying Marketing Channel Theory to Food Marketing in Developing Countries: Vertical Disintegration Model for Horticultural Marketing Channels in Kenya