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Governance with complex structures: evidence from Western European countries

Author

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  • Mário S. Santos
  • António C. Moreira
  • Elisabete S. Vieira

Abstract

This paper investigates if the existence of complex structures plays an important role in corporate governance. It uses GMM estimation on a panel of Western European firms. We find that the presence of a second and third large shareholder has a significant positive effect on firm value. This study underlines the importance of the number of blockholders as a determinant of firm value, when taken as a moderator of the contestability effect. It shows that the legal context and company-specific characteristics play a crucial moderating role for contestability. In contrast to previous research, we find that contestability plays a less relevant role in family firms. We also find that this last result does not vary significantly with the identity of the remaining elements of the coalition. Also, our study suggests that contestability is less important in companies led by majority shareholders.

Suggested Citation

  • Mário S. Santos & António C. Moreira & Elisabete S. Vieira, 2015. "Governance with complex structures: evidence from Western European countries," Journal of Business Economics and Management, Taylor & Francis Journals, vol. 16(3), pages 542-557, June.
    • Handle: RePEc:taf:jbemgt:v:16:y:2015:i:3:p:542-557
    DOI: 10.3846/16111699.2013.772915
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    Cited by:

    1. Yueyang Zhao & Jinzhou Mao, 2023. "Mixed ownership reforms and the transparency of nonstate‐owned enterprises: Evidence from China," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 44(1), pages 271-284, January.
    2. Rossi, Fabrizio & Barth, James R. & Cebula, Richard J., 2018. "Do shareholder coalitions affect agency costs? Evidence from Italian-listed companies," Research in International Business and Finance, Elsevier, vol. 46(C), pages 181-200.
    3. Bornhausen, Anna Maria, 2022. "Conceptualizing cross-country analyses of family firms: A systematic review and future research agenda," International Business Review, Elsevier, vol. 31(4).

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