Corporate Monitoring by Blockholders in Europe: Empirical Evidence of Managerial Disciplining in Belgium, France, Germany and the UK

Koke, Jens F.; Dherment-Ferere, Isabelle; Renneboog, Luc

doi:10.2139/ssrn.358286

Corporate Monitoring by Blockholders in Europe: Empirical Evidence of Managerial Disciplining in Belgium, France, Germany and the UK

ZEW Discussion Paper No. 01-24

40 Pages Posted: 24 Jun 2003

See all articles by Jens F. Koke

Isabelle Dherment-Ferere

University of Toulon and Var; University of Law, Economics and Science of Aix-Marseilles III

Luc Renneboog

Tilburg University - Department of Finance; European Corporate Governance Institute (ECGI); Tilburg Law and Economics Center (TILEC)

Date Written: May 15, 2001

Abstract

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

Suggested Citation: Suggested Citation

Koke, Jens F. and Dherment-Ferere, Isabelle and Renneboog, Luc, Corporate Monitoring by Blockholders in Europe: Empirical Evidence of Managerial Disciplining in Belgium, France, Germany and the UK (May 15, 2001). ZEW Discussion Paper No. 01-24. Available at SSRN: https://ssrn.com/abstract=358286 or http://dx.doi.org/10.2139/ssrn.358286