Corporate Monitoring by Blockholders in Europe: Empirical Evidence of Managerial Disciplining in Belgium, France, Germany and the UK
40 Pages Posted: 24 Jun 2003
Date Written: May 15, 2001
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.
Keywords: corporate governance, managerial disciplining, ownership structure, CEO succession
JEL Classification: G3, G32
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