The Effect of Changes in Ownership Structure on Performance: Evidence from the Thrift Industry

38 Pages Posted: 3 Jul 1998 Last revised: 18 Nov 2008

See all articles by Rebel A. Cole

Rebel A. Cole

Florida Atlantic University

Hamid Mehran

Independent

Date Written: January 12, 1998

Abstract

Restrictions on the ownership structure of a public company may harm the company's performance by preventing owners from choosing the best structure. We examine the stock-price performance and ownership structure, before and after the expiration of anti-takeover regulations, of a sample of thrift institutions that converted from mutual to stock ownership. We find that after the anti-takeover provisions expire, firm performance improves significantly, and the portions of the firm owned by managers, noninstitutional outside block holders, and the firm's employee stock ownership plan increase. Changes in performance are positively associated with changes in ownership by managers and by noninstitutional outside block holders but negatively associated with changes in ownership by employee stock ownership plans.

Keywords: anti-takeover provisions, corporate control, ownership structure, regulation, savings & loan, S&L, thrift

JEL Classification: G21, G28, G32, G38

Suggested Citation

Cole, Rebel A. and Mehran, Hamid, The Effect of Changes in Ownership Structure on Performance: Evidence from the Thrift Industry (January 12, 1998). Board of Governors of the Federal Reserve System Finance and Economics Discussion Series, FEDS Paper No. 96-6. Available at SSRN: https://ssrn.com/abstract=7286 or http://dx.doi.org/10.2139/ssrn.7286

Rebel A. Cole (Contact Author)

Florida Atlantic University ( email )

College of Business
777 Glades Road
Boca Raton, FL 33431
United States
1-561-297-4969 (Phone)

HOME PAGE: http://rebelcole.com

Hamid Mehran

Independent ( email )

No Address Available

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