Managerial concentration, ownership concentration, and firm value: evidence from Spanish SMEs
EntityUAM. Departamento de Financiación e Investigación Comercial
PublisherAsociación Española de Contabilidad y Administración de Empresas (AECA)
10.26784/sbir.v7i1.541Small Business International Review 7.1 (2023): e541
SubjectsFirm value; Managerial concentration; Ownership concentration; Corporate governance; Alternative stock exchange; Economía
RightsCopyright 2023 Leslie Rodríguez-Valencia, Prosper Lamothe Fernández
Esta obra está bajo una licencia de Creative Commons Reconocimiento-NoComercial-SinObraDerivada 4.0 Internacional.
Various corporate governance theories indicate that governance in small and medium-sized enterprises (SMEs) differs to that of larger corporations due to the ownership-management function within the organizational structure. This article provides empirical evidence of enhanced firm value in a sample of listed SMEs resulting from certain corporate governance mechanisms related to managerial and ownership concentration. The empirical analysis conducted in this paper is based on a panel data set consisting of 108 small and medium-sized public firms on the Spanish alternative stock exchange over a time frame of five years (2015-2019). The results suggest that CEO duality, the controlling shareholders, and the second largest shareholders all improve firm value. Conversely, the ratio of independent directors has a negative impact on firm value. These findings are robust to alternative model specifications such as dynamic panel estimators (Generalized Method of Moments -GMM-) and instrumental variable methods. Overall, we show that the governance configuration of listed SMEs can mitigate several of the central issues, such as agency problems, that large corporations face
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