The aim of this review is to classify research papers on major vs. minor shareholders conflicts and ownership concentration. These issues are closely related both to each other and to manager vs. owner conflicts. Ownership concentration is property distribution among shareholders. Ownership concentration studies consider the following questions: how many major and minor shareholders are there in the company; how many inside shareholders are there and if they are minor or major; in what way concentration influences performance of the company; what costs are associated with major vs. minor shareholders conflicts etc. The bond between ownership concentration and manager vs. owner conflict is due to the fact that often managers are major shareholders along with other owners. In such cases incentive hypothesis, entranchement hypothesis, monitoring and control costs, as well as their effect on performance, should be considered together.
An analysis of economical, financial and organizational nature of leasing, factoring and forfaiting demonstrates that all these forms of financial entrepreneurship have an outsourcing component. Notion of intermediary financing is proposed. A comparative analysis of these business tools has been made. A list of risks typical for providers of these services is given.
A large number of research papers on relation between currency risk and firms’ value have been published during last several decades. Researches acknowledged that currency risk could be a pricing factor. We follow models’ developments under the framework of asset pricing theory and come to a conclusion that dynamic and asymmetric international asset pricing models were considered among the best for capturing exposure to exchange rate risk in developed and emerging markets. Exchange rate exposure became a separate topic of research. Different determinants of exposure were discovered in the literature. Economists estimated their influence on sensitivity of stock returns to currency volatility. There is certain specific in currency exposure research. In this paper we considered different methodological aspects of exchange rate exposure modelling and mentioned details of empirical analysis in emerging markets.
The paper contains highlighting and theoretical level analysis of the factors positively and negatively influencing profitability of vertically integrated and non-integrated companies. Advantages and disadvantages of choosing the strategy of vertical integration are proved along with systematization of main approaches to these item researching. The difference of the efficiency between the integrated and non-integrated companies’ performance is considered, which is the key issue of the best way of large companies development. The central issue of the research, that is based on the theory highlighted in this paper, is the utility of existence of large vertically integrated companies in emerging capital markets. Are such companies improving the whole economy of an emerging country or are they slowdown transition to market relations in all industries? This article was motivated by the trend in developed capital markets towards dividing big holding companies to small segmental units.
The efficiency of vertically integrated companies’ performance should be studied through comparison the whole corporation and a set of detached businesses, that could be parts of integrated company. The simplest way of such analysis, which was used by the first researchers in this field, is to compare total costs and to depict different types of economies. On the more sophisticated level of analysis must be taken into account such issues as principal-agent problem, technological economies and risk level minimization under the conditions of legal restrictions, which limits costs saving between two branches of one company. The third approach to consider all influencing companies’ performance factors is the analysis of financial figures, especially the analysis of different ratios, that can show relative efficiency of companies. By doing such analysis not only traditional components of synergetic effect are taken into consideration, but also financial features of M&A deals that can lead to a bankruptcy are covered.
This article is devoted to the decision-making mechanism of vertical integration at a company level. Different approaches to the analysis of vertical integration transactions, which exist for today, are revealed. The estimation of existing ways of the analysis is given, relationships between the various factors, which influence the general result of vertical integration transactions, are determined. In the article the recommendations for the Russian car industry are given on the basis of the review of the vertically integrated companies, which exist for today, the mathematical model is described, which explains the logic of the firm's decision of integration.
The paper presents the results of dynamic trade-off empirical testing on the data of 30 countries for 2005-2010. The authors show that the speed of adjustment to the target capital structure for Western Europe countries is mostly determined by internal factors. Meanwhile for emerging capital market the growth rate of GDP as well as time dummy variables are crucial determinants of speed of adjustment. Institutional factors such as credit and bankruptcy institutions developments revealed nonlinear relationship with the speed of adjustment. Moreover, investor protection developmens is also a significant determinant that exhibits positive relationship for both developed and emerging markets.
The paper represents the results of empirical testing of market reaction at the announcements on takeovers at Russian and European financial markets. It contains an attempt to reveal the differences in market reactions between both friendly acquisitions and hostile takeovers, and European and Russian markets. On the base of the study, the authors conclude that the difference in the reaction at the information on friendly acquisitions and hostile takeovers is significantly valuable for all the markets. The information on hostile takeovers causes the negative reaction elsewhere, but its impact at the Russian market is stronger than the European ones. In addition, the authors examine the features of the deals and the acquiring companies, and their relationship with the cumulative abnormal returns caused by acquisitions. The study is performed by event studies and regression analysis. The sample consists of 220 announcements of 93 public companies from Russia and 6 European countries from different sectors of economy for the period of 2006–2015.
The article gives an overview of influence of stock market discrimination on market value of companies in China. There are two types of shares on Chinese stock market: class A shares, which are available for domestic investors, and class B shares, which are available for foreign investors. Such market structure is not a unique Chinese market's feature. It is also used in such countries as Finland, Singapore, Switzerland, Thailand, etc. What differs Chinese market from markets with similar structure is the fact that class B shares are traded with substantial discount to class A shares. Such a situation is explained by such factors informational asymmetry between domestic and foreign investors; different liquidity of different classes of shares; diversification effect, connected with investment in Chinese stock market; size of companies; ratio of amounts of shares of different classes; stock exchange where company's shares are traded.