Does Margin Call Pressure Affect the M&A Decision of Controlling Shareholders With Equity Pledges: Evidence From Chinese Listed Company

The equity pledge has become a universal practice in the world. Taking Chinese listed companies from 2007 to 2020 as a sample, this paper investigates the influence of controlling shareholders’ equity pledges on M&A behavior. It is found that the probability of M&A of listed companies is greater when the controlling shareholder has an equity pledge (or the proportion of equity pledge of controlling shareholder is higher). M&A activities can raise the stock price and play the role of market value management. Controlling shareholders with margin call pressure have stronger motivation to use M&A to increase their share price. Investors seem to be aware of this behavior and underestimate the potential benefits of M&A under this pressure. Propensity score matching (PSM) and difference in difference (DID) were used to test endogeneity and the results were still robust. Overall, our results reveal the impact of equity pledges by controlling shareholders on M&A. Furthermore, margin call pressure, this organizational psychology promotes this possibility.

Data on empirical estimation of the relationship between agency costs and ownership structure in Italian listed companies (2002-2013)

The data presented in this article are related to the research article entitled “Do shareholder coalitions affect agency costs? Evidence from Italian-listed companies”, Research in International Business and Finance, Forthcoming (Rossi et al., 2018) [1]. The study shows an empirical analysis using an extensive balanced panel dataset of 163 Italian listed companies for the period 2002–2013, which is a sample yielding 1956 firm-year observations. The sample consists primarily of manufacturing firms, but also includes some service enterprises. However all financial firms and regulated utilities are excluded. We collected data on ownership structure for the entire study period. Information was acquired from the Consob website and the individual company reports on corporate governance. Data on firm-level indicators (debt-to-capital ratio, firm size, and age of the firm) for all companies in the sample were collected from Datastream, Bloomberg, and Calepino dell’Azionista, as well as obtained manually from the financial statements of the individual companies being studied. Our dataset contains several measures of ownership structure for Italian listed companies.

The Bright Side of Corporate Diversification: Evidence from Internal Labor Markets

We document differences in human-capital deployment between diversified and focused firms. We find that diversified firms have higher labor productivity and that they redeploy labor to industries with better prospects in response to changing opportunities. The opportunities and incentives provided in internal labor markets in turn affect the development of workers' human capital. We find that workers more frequently transition to other industries in which their diversified firms operate and with smaller wage losses compared with workers in the open market, even when they leave their original firms. Overall, internal labor markets provide a bright side to corporate diversification.