Anmerkungen:
In: Review of Integrative Business and Economics Research, Vol. 6, No. 2, pp. 28-37, April 2017
Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments April 11, 2017 erstellt
Beschreibung:
Dual class firms face a great criticism since they violate one share one vote strategy. It is believed that insiders of dual class firms expropriate the minority shareholders wealth and the governance practices are weak compared to single class firms. We try to investigate the relationship of governance practices measured by board size, ratio of independent directors, CEO-Chairman duality, Debt ratio, dividend payout and institutional investment pattern with the structure (single or dual class structure) choice of firm. We find by using OLS regression that dual class firms show their commitment to the rights of shareholders by hiring more independent directors and by attracting institutional investors but in actual they control them through controversial CEO-Chairman duality, as independent director may not take stand against CEO who has the authority of his hiring and firing hence independent directors fail in delivering what they actually owe to outside shareholders. We also find the significant and positive relationship of wedge with CEO-Chairman duality and ratio of independent directors. We neither find dual class firms of China using debt nor dividend as governance mechanism to direct the future cash flow of firm