Impact Of Managerial Entrenchment Research Articles

Impact of Managerial Entrenchment on Financial Flexibility and Leverage of Small Public Firms: Policy Implications for Global Economic Crisis

Impact of Managerial Entrenchment on Financial Flexibility and Leverage of Small Public Firms: Policy Implications for Global Economic Crisis

The Impact of Managerial Entrenchment on Agency Costs: An Empirical Investigation Using UK Panel Data

Abstract This paper empirically investigates the relationship between managerial entrenchment and agency costs for a large sample of UK firms over the period 1999–2005. To measure managerial entrenchment, we use detailed information on ownership and board structures and managerial compensation. We develop a managerial entrenchment index, which captures the extent to which managers have the ability and incentives to expropriate wealth from shareholders. Our findings, which are based on a dynamic panel data analysis, show that there is a strong negative relationship between managerial entrenchment and our inverse proxy for agency costs, namely asset turnover ratio. There is also evidence that short‐term debt and dividend payments work as effective corporate governance devices for UK firms. Finally, our findings reveal that agency costs are persistent over time. The results are robust to a number of alternative specifications, including varying measures of managerial entrenchment and agency costs.

Does managerial entrenchment matter in risk taking? Evidence from the Tunisian context

Building on agency and prospect theory views, many researchers have analyzed the executive risk-taking behavior. They have usually put in evidence the role of the mechanisms of corporate governance. In this research, we try to point out that even managerial entrenchment does matter. We consider the non financial firms that are listed in the Tunisian Stock exchange during the 1996 - 2006 period. To reveal the managerial risk taking, we apply factor analysis so as to construct a global index. To find out the impact of managerial entrenchment on risk-taking, we consider the ownership of the manager, his experience within the firm as well as his age. The size of the firm is also worth investigating while exploring managerial risk taking. The results are somewhat robust to different specifications. They may enhance and extend the agency-based corporate governance literature on executive risk-taking. But above all, they may shed some light on the emerging markets context namely the Tunisian one

Managerial Entrenchment and Performance of Firms

The objective of this article is to determine the relation between managerial ownership and the performance of firms as well as the impact of managerial entrenchment on the firms' financial policy. The analyses of regressions on 283 firms show that the relation between the managerial ownership and the performance of firms is non linear. It takes the shape of the alignment, then of the entrenchment, then again of the alignment, as the managerial ownership increases. The manager possessing a part of capital between 5.72% and 55.47% is more susceptible to be entrenched and he/she prefers a weak ratio of debt to escape both the shareholders' control and the market's pressures of performance.