Corporate Policy Changes Research Articles

Do Shareholder Preferences Affect Corporate Policies?

This paper examines the revealed preferences of institutional investors for firm policies. I find that institutional investors are a heterogeneous group as they exhibit systematic differences in terms of the financial and investment policies of their shareholdings. The null hypothesis that the preferences for leverage of all institutional investors are the same is strongly rejected both for the raw debt ratios and when the debt ratios are adjusted for industry and firm characteristics. Furthermore, I find an interesting relationship between these revealed preferences and the corporate decisions of the firms they do hold. I find that these preferences are related to subsequent changes in the financial and investment policies of firms. In particular, a firm is more likely to decrease (increase) its leverage ratio if its current leverage is higher (lower) than the aggregated preference of its institutional shareholders. Quantitatively, about 17% of the gap between the firm's current debt ratio and the debt ratio preferred by its institutional shareholders is closed in one year. Similarly, a firm is more likely to increase its investment if its current investment ratio is lower than the preferences of its shareholders. I find systematic evidence that corporate policy changes related to shareholder preferences are more likely to be incorporated when firm managers are more likely to accommodate the preferences of institutional shareholders due to firm characteristics (e.g., smaller and younger firms) or managerial characteristics (CEOs with stronger career concerns, e.g., younger CEOs who do not hold joint CEO-chairman appointments). These corporate policy changes are consistent with an implicit threat of voting with their feet from institutional shareholders: I find evidence that policy changes in the opposite direction of institutional investors' aggregated preference are accompanied by heavier selling activities by current institutional shareholders and negative stock market performance. Overall, the evidence suggests that the (revealed) preferences of institutional shareholders are important determinants of corporate policies.

Organizing for Better Working Conditions and Wages: The Unite Here! Hotel Workers Rising Campaign

This article examines some of the strategies and success of the UNITE HERE! union in its ongoing Hotel Workers Rising: Lifting One Another Above the Poverty Line campaign in the United States and Canada. This unique campaign has generated national attention in both the United States and Canada about issues facing hotel workers, including how changes in corporate policies aimed at pleasing the consumer - such as the shift to 'heavenly' beds - has had deleterious consequences for Room Attendants in terms of back injuries from lifting heavier mattresses. How successful has the UNITE HERE! been so far in terms of securing new contracts? What about in terms of organizing urban, suburban, and rural hotel employees? What barriers do unions face when organizing hotel workers? What does comparing union density rates in the hotel sector across cities reveal? After beginning to address some of these questions, this article concludes by providing some policy recommendations.

Fortune 500 list revisited 12 years later: Still an endangered species for academic research?

The study reported here is a replication of a 1974 study published in the Journal of Business Research that sought to determine corporate policies toward responding to academic research, what top corporate executives liked and disliked about such studies, and what factors influenced their decisions on whether to respond. The results of this study indicate that there have been considerable changes in corporate policies, the volume of surveys reaching corporate executives, and the factors they like and dislike about academic mail surveys. The findings suggest that academicians must be more careful in targeting on this set of firms to ensure that the time for completion is minimized and the value of the studies to the firms is maximized.