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Corporate monitoring by blockholders in Europe: empirical evidence of managerial disciplining in Belgium, France, Germany, and the UK

  • Dherment-Ferere, Isabelle
  • Köke, Jens
  • Renneboog, Luc

This study examines managerial disciplining in poorly performing firms using large panels for Belgian, French, German and UK firms. We consider the monitoring role of large blockholders, the market for share blocks, creditors, and non-executive directors. Board restructuring is correlated to poor performance, but not for France. Neither existing blockholders nor creditors play an active role in disciplining. Block purchases have a monitoring role in Belgium and Germany, but not in France and the UK. Large boards facilitate disciplining, but the role of non-executives is ambiguous.

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Paper provided by ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research in its series ZEW Discussion Papers with number 01-24.

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Date of creation: 2001
Date of revision:
Handle: RePEc:zbw:zewdip:5379
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  1. Barclay, Michael J & Holderness, Clifford G, 1991. " Negotiated Block Trades and Corporate Control," Journal of Finance, American Finance Association, vol. 46(3), pages 861-78, July.
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  5. Franks, Julian R & Mayer, Colin & Renneboog, Luc, 2001. "Who Disciplines Management in Poorly Performing Companies?," CEPR Discussion Papers 2949, C.E.P.R. Discussion Papers.
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  7. Gugler, Klaus (ed.), 2001. "Corporate Governance and Economic Performance," OUP Catalogue, Oxford University Press, number 9780199245703, July.
  8. Rafael La Porta & Florencio Lopez-de-Silane & Andrei Shleifer & Robert W. Vishny, 1997. "Legal Determinants of External Finance," NBER Working Papers 5879, National Bureau of Economic Research, Inc.
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  11. Rajan, Raghuram G & Zingales, Luigi, 1998. "Financial Dependence and Growth," American Economic Review, American Economic Association, vol. 88(3), pages 559-86, June.
  12. Jennifer E. Bethel & Julia Porter Liebeskind & Tim Opler, 1998. "Block Share Purchases and Corporate Performance," Journal of Finance, American Finance Association, vol. 53(2), pages 605-634, 04.
  13. Ross Levine, 1998. "The legal environment, banks, and long-run economic growth," Proceedings, Federal Reserve Bank of Cleveland, issue Aug, pages 596-620.
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  18. repec:tpr:qjecon:v:112:y:1997:i:3:p:693-728 is not listed on IDEAS
  19. Gorton, Gary & Schmid, Frank A., 2000. "Universal banking and the performance of German firms," Journal of Financial Economics, Elsevier, vol. 58(1-2), pages 29-80.
  20. Barclay, Michael J. & Holderness, Clifford G., 1989. "Private benefits from control of public corporations," Journal of Financial Economics, Elsevier, vol. 25(2), pages 371-395, December.
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