Browsing by Subject "valuation"

Sort by: Order: Results:

Now showing items 1-3 of 3
  • Keinonen, Henrik (Hanken School of Economics, 2021-12-08)
    The aim of this research is to study agency problems in entrepreneurial ventures and publicly listed companies (PLCs). Agency problems originate from asymmetric information, and can be detrimental to a firm’s investment attractiveness, high-growth ventures’ financial markets, and listed companies’ valuation. The overarching research question is what are the agency problems among entrepreneurial ventures and publicly listed companies, are these problems similar in nature, and can they be prevented or cured? The question is addressed in three different settings. Paper I reflects on business angel networks’ (BANs) value to startup entrepreneurs and their societal context, and provides statistics on BANs in Europe and the US. Paper II empirically investigates the impact of Israeli scaleup entrepreneurs’ criteria when selecting a Venture Capital (VC) firm, inverting the typical research order. Paper III contributes by providing answers to why certain blockholders in Finnish PLCs do not take responsibility for the company’s long-run development, but instead maximise their private utility. The authors employ descriptive statistics and quantitative research: interview data, an ordered logit regression model, longitudinal panel data with cross-sectional and time-series observations, and ordinary least squares regression. Agency problems in startups stem from the transactional process between entrepreneur and angel investor. In this setting, the entrepreneur might provide untruthful information to the investor or abuse the funding. BAN service quality may, however, reduce information asymmetries in entrepreneurial venture quality, and build trust between entrepreneurs and investors. BANs in more mature business angel markets tend to offer better quality services than those in less mature markets. Agency problems in scaleups manifest between VC firms and entrepreneurs, where VC managers may push entrepreneurs to take excessive risks that endanger their personal wealth. Empirically, entrepreneurial experience has a negative relationship with the importance entrepreneurs attach to valuation, which is moderated by the importance they attach to VC networks and reputation. Honest signalling of the parties’ qualities may reduce agency problems in the startup and scaleup phases. Large state ownership and company value are negatively associated, suggesting that government owners may promote political goals rather than long-term value for all shareholders. Liquidating state ownership in non-strategic companies and re-investing the assets through ETF funds would constitute a Pareto improvement. Ultimately, this study shows that agency problems are contextual and differ on the firm’s stage of development, namely startup, scaleup or PLC. But agency problems can be alleviated, which is important to the aggregate economy.
  • Maury, Benjamin (Svenska handelshögskolan, 2004-05-14)
    “Corporate governance deals with the ways in which suppliers of finance to firms assure themselves of getting a return on their investment” (Shleifer and Vishny (1997, p. 737). According to La Porta et al. (1999), research in corporate finance relevant for most countries should focus on the incentives and capabilities of controlling shareholders to treat themselves preferentially at the expense of minority shareholders. Accordingly, this thesis sets out to answer a number of research questions regarding the role of large shareholders in public firms that have received little attention in the literature so far. A common theme in the essays stems from the costs and benefits of individual large-block owners and the role of control contestability from the perspective of outside minority shareholders. The first essay empirically examines whether there are systematic performance differences between family controlled and nonfamily controlled firms in Western Europe. In contrast to the widely held view that family control penalizes firm value, the essay shows that publicly traded family firms have higher performance than comparable firms. In the second essay, we present both theoretical and empirical analysis on the effects of control contestability on firm valuation. Consistent with the theoretical model, the empirical results show that minority shareholders benefit from a more contestable control structure. The third essay explores the effects of individual large-block owners on top management turnover and board appointments in Finnish listed firms. The results indicate that firm performance is an important determinant for management and board restructurings. For certain types of turnover decisions the corporate governance structure influences the performance / turnover sensitivity. In the fourth essay, we investigate the relation between the governance structure and dividend policy in Finnish listed firms. We find evidence in support of the outcome agency model of dividends stating that lower agency conflicts should be associated with higher dividend payouts.
  • Maury, Benjamin; Liljeblom, Eva (Wiley-Blackwell, 2010-12-31)
    This paper examines the impact of a regime shift on the valuation of politically powerful oligarch firms. Focusing on the Yeltsin-Putin regime shift in Russia, we find that the valuations of outside shareholders claims are significantly higher under the Putin regime than under the Yeltsin regime after controlling for industry and time effects. The findings suggest that the increasing cost of extracting private benefits outweigh the reduction in the value of political connections following the political regime change. The results are also consistent with changes in the risk of state expropriation. Our results show that effects driven by the political regime change complement the traditional view stating that increased ownership concentration improved the performance of Russian oligarch firms.