Managerial Entrenchment and Firm Value: A Dynamic Perspective
We examine the impact of managerial entrenchment on firm value using a dynamic model with firm fixed effects. To estimate the model, we employ the long-difference technique, which is shown by our simulation to deliver the least biased estimates. Based on a large sample of U.S. companies, we document...
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sg-ntu-dr.10356-810562023-05-19T06:44:41Z Managerial Entrenchment and Firm Value: A Dynamic Perspective Chang, Xin Zhang, Hong Feng Nanyang Business School We examine the impact of managerial entrenchment on firm value using a dynamic model with firm fixed effects. To estimate the model, we employ the long-difference technique, which is shown by our simulation to deliver the least biased estimates. Based on a large sample of U.S. companies, we document a significantly negative and causal effect of managerial entrenchment on firm value after taking into account omitted variables, reverse causality, and highly persistent endogenous variables. Additional analysis suggests that the causality running from managerial entrenchment to firm value is more pronounced than that for reverse causality. Published version 2015-12-15T02:19:39Z 2019-12-06T14:20:29Z 2015-12-15T02:19:39Z 2019-12-06T14:20:29Z 2015 Journal Article Chang, X., & Zhang, H. F. (2015). Managerial Entrenchment and Firm Value: A Dynamic Perspective. Journal of Financial and Quantitative Analysis, 50(5). 0022-1090 https://hdl.handle.net/10356/81056 http://hdl.handle.net/10220/39088 10.1017/S0022109015000423 en Journal of Financial and Quantitative Analysis © 2015 Michael G. Foster School of Business, University of Washington. This paper was published in Journal of Financial and Quantitative Analysis and is made available as an electronic reprint (preprint) with permission of Michael G. Foster School of Business, University of Washington. The published version is available at: [http://dx.doi.org/10.1017/S0022109015000423]. One print or electronic copy may be made for personal use only. Systematic or multiple reproduction, distribution to multiple locations via electronic or other means, duplication of any material in this paper for a fee or for commercial purposes, or modification of the content of the paper is prohibited and is subject to penalties under law. 21 p. application/pdf |
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We examine the impact of managerial entrenchment on firm value using a dynamic model with firm fixed effects. To estimate the model, we employ the long-difference technique, which is shown by our simulation to deliver the least biased estimates. Based on a large sample of U.S. companies, we document a significantly negative and causal effect of managerial entrenchment on firm value after taking into account omitted variables, reverse causality, and highly persistent endogenous variables. Additional analysis suggests that the causality running from managerial entrenchment to firm value is more pronounced than that for reverse causality. |
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Nanyang Business School |
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Nanyang Business School Chang, Xin Zhang, Hong Feng |
| format |
Article |
| author |
Chang, Xin Zhang, Hong Feng |
| spellingShingle |
Chang, Xin Zhang, Hong Feng Managerial Entrenchment and Firm Value: A Dynamic Perspective |
| author_sort |
Chang, Xin |
| title |
Managerial Entrenchment and Firm Value: A Dynamic Perspective |
| title_short |
Managerial Entrenchment and Firm Value: A Dynamic Perspective |
| title_full |
Managerial Entrenchment and Firm Value: A Dynamic Perspective |
| title_fullStr |
Managerial Entrenchment and Firm Value: A Dynamic Perspective |
| title_full_unstemmed |
Managerial Entrenchment and Firm Value: A Dynamic Perspective |
| title_sort |
managerial entrenchment and firm value: a dynamic perspective |
| publishDate |
2015 |
| url |
https://hdl.handle.net/10356/81056 http://hdl.handle.net/10220/39088 |
| _version_ |
1770566795047993344 |