Identifying the effect of managerial control on firm performance

Adams, Renée and Santos, Joao A.C. (2006) Identifying the effect of managerial control on firm performance. Journal of Accounting and Economics, 41 1-2: 55-85. doi:10.1016/j.jacceco.2005.08.001

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Author Adams, Renée
Santos, Joao A.C.
Title Identifying the effect of managerial control on firm performance
Journal name Journal of Accounting and Economics   Check publisher's open access policy
ISSN 0165-4101
Publication date 2006-04
Sub-type Article (original research)
DOI 10.1016/j.jacceco.2005.08.001
Volume 41
Issue 1-2
Start page 55
End page 85
Total pages 31
Place of publication Amsterdam, Netherlands
Publisher Elsevier
Language eng
Subject 150201 Finance
Formatted abstract
Using a unique sample, we attempt to identify the consequence of the separation between inside ownership and control for firm performance. We exploit the fact that banking institutions may hold their own shares in trust to construct a clean measure of the wedge between inside voting control and cash flow rights. These shares provide managers with no monetary incentives, since their dividends accrue to trust beneficiaries. However, managers may have the authority to vote these shares. Contrary to the belief that managerial control is purely detrimental, we find that it has positive effects on performance over at least some range.
© 2006 Elsevier B.V. All rights reserved.
Keyword Managerial control
Voting rights
Performance measurement
Trust investments
Q-Index Code C1

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Citation counts: TR Web of Science Citation Count  Cited 19 times in Thomson Reuters Web of Science Article | Citations
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Created: Mon, 22 May 2006, 20:10:33 EST