Equity Ownership Research Articles

Common institutional ownership and cost of equity: evidence from publicly listed companies in China

Common institutional ownership and cost of equity: evidence from publicly listed companies in China

The first study of majority employee-owned enterprises in the U.S.: an historical retrospective analysis

ABSTRACT Research conducted in 2010 to identify and collect information about majority employee-owned enterprises in the U.S. is documented in this paper. This research identified 1,289 firms that were majority owned by their employees and their basic characteristics are reported here. Overwhelmingly, these companies were owned through an employee stock ownership plan (ESOP). They were characteristically older and larger than conventionally owned firms, as well as more concentrated in manufacturing and wholesale trade, and more likely to be located in the Midwest than U.S. firms overall. The paper argues that because the effects of employee ownership are likely to be correlated with the degree of employee ownership, research on ESOPs should endeavor to identify the degree of plan ownership of equity rather than simply the presence of a plan. This may also provide a method to address the non-random assignment of ESOPs to firms. The majority employee-owned ESOPs documented in this paper provide a viable population to study the effect of residual claimancy on employee behavior in isolation from other potentially confounding factors.

7372 Anti-Corticotropin-Releasing Hormone (CRH) Monoclonal Antibody HBM9013 For The Treatment Of Congenital Adrenal Hyperplasia (CAH) And Polycystic Ovarian Syndrome (PCOS)

Abstract Disclosure: H. Pan: None. L.L. Liu: None. Q. Lv: None. F.G. Grosveld: None. D. Drabek: None. R.V. Haperen: None. X. Wang: None. Y. He: None. Y. Wang: None. J. Huang: None. J. Lee: None. G. Zhang: None. J.J. Rong: None. H.V. Chen: None. J.A. Majzoub: Advisory Board Member; Self; Chair of SAB of Harbour BioMed Alpha Therapeutics, which owns the rights of HBM9013.. Stock Owner; Self; Equity Owner of Harbour BioMed Alpha Therapeutics, which owns the rights of HBM9013.. J.J. Zhao: None. Anti-Corticotropin-Releasing Hormone (CRH) Monoclonal Antibody HBM9013 for the Treatment of Congenital Adrenal Hyperplasia (CAH) and Polycystic Ovarian Syndrome (PCOS). Abstract Congenital Adrenal Hyperplasia (CAH) is a rare autosomal recessive genetic disease due to mutation of CYP21A2 which leads to deficiency of 21-Hydroxylase enzymatic activity. Classical CAH patients are born with life-threatening deficiency of glucocorticoid (GC) and mineralocorticoid. Due to this enzymatic block and the lack of negative feedback on the hypothalamic-pituitary-adrenal (HPA) axis by GC, the adrenal gland produces excessive amounts of androgen which result in masculinized genitalia and virilization. The current standard care is supraphysiological doses of GC, which are difficult to balance between excess GC exposure and excess androgen secretion. Too little GC does not suppress production of androgen sufficiently and too much GC leads to Cushing Syndrome (CS). Previous work found that corticotropin-releasing hormone (CRH) is absolutely required for activation of the HPA axis during loss of GC negative feedback, via adrenocorticotropic hormone (ACTH) (1), which is necessary for production of adrenal androgens (2). We report here the development of Anti-CRH humanized monoclonal antibody HBM9013 (PR302334-24) for the treatment of CAH. HBM9013 binds to CRH with high affinity and neutralizes its signaling through both CRH Receptor 1 (CRHR1) and CRH Receptor 2 (CRHR2) in vitro. HBM9013 shows in vivo activities in two preclinical models. It blocks restraint stress-induced increases in plasma ACTH and corticosterone in mouse and rat. Mouse ACTH and Corticosterone were reduced from 210 ± 63 pg/ml to 27 ± 8 pg/ml (Mean ± SD, p = 5.2*10-6; IgG1 Control Group = 6 mice; HBM9013 Group = 8 mice) and from 303 ± 28 ng/ml to 57 ± 15 ng/ml (Mean ± SD, p = 6.2*10-[1][1]; IgG1 Control Group = 6 mice; HBM9013 Group = 8 mice), respectively. It also markedly reduces the constitutive, extremely elevated plasma ACTH levels in Mrap-knockout mice from 3847 ± 240 pg/mL to 1080 ± 302 pg/mL (Mean ± SD, n = 5 independent experiments, p = 2.3*10-7). HBM9013 has excellent CMC characteristics with ∼5 g/L titer and ∼80% yield. HBM9013 also has an excellent safety profile with no-observed-adverse-effect-level (NOAEL) of 150 mg/kg in weekly dosing for five doses in both rat and cynomolgus dose-ranging-finding (DRF) toxicology studies. HBM9013 is formulated up to 150 mg/ml as a weekly to monthly subcutaneous injection for ease of administration and compliance for CAH patient. HBM9013 could be a next generation therapy for CAH, in combination with a low physiological dose of GC that would avoid CS. Since ∼50% of Polycystic Ovarian Syndrome (PCOS) androgens may be of adrenal origin, we believe that HBM9013 could also be indicated for PCOS. References(1)Muglia LJ et al. J Clin Invest. 2000. 105:1269-77.(2)Weber A et al. Clin Endocrinol. 1997. 46:431-7. Presentation: 6/1/2024

Assessing Private Equity Involvement in Ophthalmology: Parallels with the Past, Concerns for the Future

PurposeTo discuss the history and current state of private equity in ophthalmology and explore potential implications for ophthalmology practices, physicians, and patients. DesignPerspective. MethodsReview of selected articles in ophthalmology and non-ophthalmology medical literature and commentary based on the authors’ experiences. ResultsInvestment in ophthalmology appeals to private equity firms because of high procedural volumes, fragmented private practices, opportunities for real estate ownership, and an aging population in need of eye care. As a result, acquisition of private practices by large private equity companies has swelled since 2015. Metropolitan areas and practices that possess ambulatory surgical centers or a high proportion of retina surgeons receive the greatest investment. However, little objective data exists regarding the benefits of this trend. Initial research suggests that private equity ownership may negatively impact patient care through greater costs, shorter appointments, and fewer Medicare/Medicaid patients seen. Skeptics of private equity also highlight concerns that include financial risk falling primarily on the acquired practice itself, a short-term business approach that rewards profit maximization, and the erosion of physician autonomy. Furthermore, young ophthalmologists express reservations about working for private equity firms. 78% of trainees indicated they would not consider employment by a private equity owned practice and 81.4% of vitreoretinal fellows voiced concerns about autonomy and job security. Proposed legislation aimed at limiting private equity acquisitions is currently under review at the statewide level, adding additional uncertainty to the future of private equity involvement in ophthalmology. ConclusionAlthough investment by private equity offers potential financial rewards and operational improvements for practices, it also raises significant concerns reminiscent of those experienced by physician practice management companies in the 1990s. Nonanecdotal data is needed to assess the benefits and future of private equity involvement in ophthalmology.

Editorial Comment on “Effect of Private Equity Ownership on Access to Outpatient Urologic Cancer Care in Medicare Recipients”

Editorial Comment on “Effect of Private Equity Ownership on Access to Outpatient Urologic Cancer Care in Medicare Recipients”

Foreign Direct Investment and Its Impact on India's Economic Growth

One of the most important ways for nations to integrate into the global economy and promote economic growth and development is through foreign direct investment, or FDI. It means that an organization or individual from one nation invests resources into the assets or commercial ventures of another nation. Foreign direct investment (FDI) denotes a long-term stake and a substantial amount of control or influence over the management of the foreign firm, in contrast to foreign portfolio investments, which consist of passive ownership of securities. Intra-company loans, reinvestment of earnings, and ownership of equity are ways to attain this control. FDI is so more than just a cash investment; it's a calculated action that has the power to influence the host nation's economic environment. Three main components make up foreign direct investment (FDI) according to the International Monetary Fund (IMF) and the Organisation for Economic Co-operation and Development (OECD): equity capital, reinvested earnings, and intra-company loans. Acquiring shares in a foreign company signifies ownership and control through equity capital. The investor's portion of profits that are reinvested in the overseas business to support development and expansion, as opposed to being sent home as dividends, is known as reinvested earnings. Funds borrowed or lent between the parent business and its overseas affiliates are referred to as intra-company loans, and they reflect continuing financial exchanges inside the corporate network. FDI may be divided into two primary categories: vertical FDI, which involves a company investing in a host nation to move upstream or downstream in different stages of production, and horizontal FDI, which involves a company replicating its home country-based activities at the same point of the value chain in a host country.

BOARD CHARACTERISTICS AND CORPORATE SOCIAL RESPONSIBILITY OF LISTED OIL AND GAS COMPANIES IN NIGERIA

This research investigated the influence of board characteristics on corporate social responsibility of listed oil and gas companies in Nigerian Exchange. Variables examined are bord size, independence, gender diversity, activity, professionalism and equity ownership of board members. While corporate social responsibility was proxy by CSR expenditure. The population consists of twelve (12) listed oil and gas firms from which five (5) firms have consistently published their annual reports within the period covered and extracted data from their respective annual reports. Panel corrected standard error was used for analysis. Findings revealed both board size and board activity have no significant impacts on CSR while in contrast, board independence, female gender, board professionalism and board equity ownership have a significant effect on CSR. It was recommended that the management of listed oil and gas companies need to have more independent outside directors on the board to enhance monitoring and CSR performance. Also, higher participation of female on the board will improve CSR performance because of their concern for environmental issues. In addition, having more members with professional expertise will improve the decision making of the board and equally shape CSR performance. Board members with equity stake will align the interest of the managers with those of shareholders and likewise, focus more on long-term goals of the firm. Listed oil and gas firm should maintain appropriate board size and required number of board meetings as stipulated by code of corporate governance.

Private Equity Acquisitions Of Hospices Are Increasing; Ownership Remains Opaque.

Private equity ownership across the US health care system is rapidly increasing, yet ownership structures are complex and opaque. We used an economic data set tracking mergers and acquisitions linked to Medicare data to identify private equity hospice acquisitions. Given the influence of for-profit ownership on hospice quality, transparent data on private equity investment are fundamental to ensuring high-quality end-of-life care.

Who is greener, more social and better-governed? Dual ownership by SRI mutual funds stands out

This study sheds new light on ESG performance and financial characteristics of companies that are constituents of portfolios of U.S. socially responsible investing (SRI) funds. We categorize SRI fund participation into three distinct types: debt-only, equity-only, and dual ownership of debt and equity. Companies with dual ownership tend to be held by relatively bigger and more concentrated SRI funds. Our holdings-based analysis reveals that these investee companies deliver superior ESG performance across all dimensions and have larger size, higher degree of financial safety, and higher profitability compared to those in equity-only or debt-only categories.

Tác động của gian lận báo cáo tài chính đến giá trị thị trường doanh nghiệp niêm yết tại Việt Nam: Vai trò điều tiết của hội đồng quản trị

One of the most alarming issues today is the transparency of financial reporting among listed companies. Nowadays, the role of the board of directors is becoming increasingly important in regulating and overseeing corporate activities to mitigate the impact of financial reporting fraud on the market value of listed companies. The sample data includes 426 listed companies on the Vietnamese stock market from 2012 to 2022 with 4,684 observations. The methods used are OLS, FEM, REM and S-GMM. The research results indicate that the board of directors plays a regulatory role in influencing the impact of financial reporting fraud on the market value of listed companies. Specifically, duality and equity ownership increase the impact, whereas independence reduces it.

Effect of Private Equity Ownership on Access to Outpatient Urologic Cancer Care in Medicare Recipients

To compare appointment availability and wait times between private equity-owned and non-private equity-owned urology clinics for 2 common urologic complaints. We identified all PE-owned urology clinic locations as of June 2022 (n=390). For each PE-owned location, a geographically matched, non-PE-owned clinic was identified. Each office was called using a "secret shopper" method with a standardized script, requesting an appointment on behalf of their Medicare-aged father for evaluation of gross hematuria or elevated prostate-specific antigen (PSA). The primary outcome was appointment availability, and the secondary outcome was wait time until soonest appointment. PE-owned and non-PE-owned clinics treated the presenting complaints with similar frequency (gross hematuria: 85% vs88%, P=.3, elevated PSA: 93% vs94%, P=.5). Wait time in days until the next available appointment was similar for PE-owned clinics compared to non-PE clinics for both complaints (gross hematuria: 16 vs13, P=.06, elevated PSA: 18 vs19, P=.7). If available, the time in days until the soonest next appointment with an advanced practice provider was also similar between PE-owned and non-PE clinics (gross hematuria: 13 vs11, P=.07, elevated PSA: 13 vs12, P=.6). Overall, there were no large-scale differences in access to outpatient urologic care between PE-owned clinics and non-PE-owned clinics. Access to care in PE-owned clinics is likely clinically similar to geographic-matched controls for Medicare patients with gross hematuria or elevated PSA.

Lessons from the Collapse of Silicon Valley Bank

The Federal Reserve's consecutive interest rate hikes led to a decline in the prices of US Treasuries and mortgage-backed securities (MBS), which comprised a significant portion of Silicon Valley Bank (SVB)'s asset portfolio. As a result, SVB experienced substantial floating losses, exceeding its owner's equity, creating immense pressure on its assets and liabilities. The analysis also highlights the simple deposit and asset structures of SVB, with a high proportion of demand deposits and a significant allocation to bonds. The aggressive interest rate hikes by the Federal Reserve, coupled with financing difficulties for startups, accelerated deposit consumption and intensified debt pressure for SVB. Furthermore, the article reveals the low coverage rate of deposit insurance, particularly at SVB, where only 7% of deposits are insured. This adds to the vulnerability of SVB and its depositors. In conclusion, this article examines SVB's balance sheet and interest rate risk exposure, identifies shortcomings in the management supervision system, and provides three reflections on the financial event.

Does Exchange-traded Fund Ownership Affect a Firm’s Expected Crash Risk?

We examine the effect of equity ownership by exchange-traded funds (ETFs) on the expected (ex ante) crash risk of the underlying securities. We observe a positive relationship between ETF ownership and the firm’s expected crash risk. Our findings suggest that ETFs increase information opacity, leading managers to withhold negative news, which in turn amplifies the anticipated crash risk. We demonstrate a positive causal relationship between ETFs and expected crash risk by using the Russell 1000/2000 index reconstitution as an instrument for ETF ownership and ETF initiation as staggered exogenous shocks on ETF ownership. Moreover, this association becomes more noticeable when ETF ownership is broader, the ETF is larger, and the company’s information environment is more opaque.

Human Resource Management Factors in Financial Analysis of Securities Companies

The outcomes of financial analysis serve as the basis for crucial decision-making in business operations. However, many small-scale securities companies tend to overlook this aspect. This study aims to investigate the relationship between financial analysis activities and business outcomes of small-scale securities companies in Vietnam. Data were collected from 92 respondents working in 27 small-scale securities companies (with owner equity of less than 250 billion Vietnamese Dong), holding positions such as management (directors, assistant directors, financial directors, chief accountants) and staff (financial and accounting personnel) involved in financial and accounting operations of Vietnamese securities companies. Sampling was conducted selectively from September 2023 to December 2023. Utilizing quantitative research, the Partial Least Squares Structural Equation Modeling (PLS-SEM) method was employed using SPSS 20 and AMOS 20 software. Results indicate that Financial Analysis Method (MAF) and Financial Analysis Content (variable FAC) positively influence financial analysis activities of small securities companies. Recommendations to enhance securities companies' business outcomes include (i) employing the EVA technique in financial analysis, (ii) improving management capabilities in financial report analysis, (iii) enhancing the skills of accounting and financial staff, and (iv) applying and operating professional ethical principles.

A Primer on Private Equity Ownership in ABA

A Primer on Private Equity Ownership in ABA

Institutional investor network and idiosyncratic volatility of stocks

AbstractThis paper constructs an institutional investor network based on the heavy holdings of the same stock in China and conducts a social network analysis to investigate the influence of this network on stock price volatility from the perspectives of network structure (density) and location (centrality). The study demonstrates that institutional investor network density is negatively related to stock price volatility, while network centrality is positively related to it. Mechanism analyses further reveal that network density reduces stock price volatility by mitigating private information arbitrage behavior among institutional investors, whereas network centrality increases stock price volatility by creating private information arbitrage opportunities within the network. Additionally, the paper finds that information asymmetry enhances the positive effect of network centrality on stock price volatility. These findings are generally consistent across subsample analyses for different market states, reactions to good and bad news, and types of equity ownership, as well as in other robustness tests. The practical implications of these findings are significant for market stability regulation.

Do foreign investors make firms more transparent? Evidence from Korea

In this study, we investigate whether foreign equity participation enhances the level of transparency in Korean listed firms’ accounting information. Using panel data on the Korean listed firms during the 1999–2019 period, we find that foreign ownership has a positive effect on the accounting transparency of firms. This suggests that foreign investors effectively monitor the earnings management activities of a firm and contribute to increasing the quality of accounting information. In addition, this positive impact of foreign equity ownership is more pronounced in non-chaebol firms than in chaebols. We further show that foreign investors reinforce the effect of changes in accounting systems on the transparency of Korean firms. Finally, firms with enhanced transparency by foreign investors perform better in the future. Overall, our study highlights the importance of foreign investors for enhancing accounting transparency in the Korean stock market. (JEL F21, F65, G15, G30, M40)

Geographic Penetration of Private Equity Ownership in Outpatient and Residential Behavioral Health

This cross-sectional study estimates the geographic penetration of private equity–owned outpatient mental health and substance use disorder practices across the US.

Private Equity Ownership in Healthcare: Quality and Patient Safety Are in Jeopardy.

Private Equity Ownership in Healthcare: Quality and Patient Safety Are in Jeopardy.

Outbound Profit Shifting and the Propensity to Engage in Cross‐Border Acquisitions

AbstractAccountability‐avoiding foreign direct investment (FDI) is a category of financial motives explaining where firms invest and how, yet our grasp of this phenomenon is incomplete. In contrast with tax‐haven FDI, where multinational enterprises (MNEs) invest in a host country to pursue inbound profit shifting, we consider a novel motive – FDI attracted by low host country financial transparency that enables outbound profit shifting (OPS). Cross‐border acquisitions (CBAs) are a takeover route to achieving OPS and global tax optimization. Our empirical context is 39,951 CBAs by 315 acquirers from 26 countries in the 1996–2015 period. We hypothesize and empirically show a positive relationship between OPS and CBAs and the probability that equity ownership of CBAs will be high. We find that the relationship between OPS and CBAs is stronger the more attractive or income unequal the host market, or when the multinational's industry is vertically or horizontally integrated. We attribute the lack of support for our hypothesis that MNEs require in‐house capability to conduct OPS to tax planning consultancies’ services. These findings highlight the role of low financial transparency as a novel locational determinant of OPS‐pursuing FDI and emphasize the distinction between inbound and outbound profit shifting as manifestations of accountability‐avoiding FDI.