Query: Managerial Entrenchment

title: Managerial entrenchment and capital structure: The effect of diversification
abstract: This paper empirically examines how diversification influences the relation between corporate governance and capital structure. Consistent with the creditor alignment hypothesis, we find a positive relation between managerial entrenchment and leverage in diversified firms. In contrast, we find a negative relation between managerial entrenchment and leverage in focused firms, which supports the managerial entrenchment hypothesis. These effects are stronger or only exist in samples with low excess values, which supports the agency channel through which governance influences leverage decisions. Our results are robust to different measures of leverage, diversification, and governance, and continue to hold when we attempt to account for selection bias and the joint endogeneity of leverage, diversification, and governance.

title: Is managerial entrenchment always bad and corporate social responsibility always good? A cross national examination of their combined influence on shareholder value
abstract: Building on the comparative capitalism's notion of institutional complementarities, we examine whether firms' simultaneous adoption of managerial entrenchment provisions (MEPs) and corporate social responsibility (CSR) reinforces or undercuts one another in influencing firm financial performance. We propose that the financial impact of such configurations is contingent on the country's institutional setting. In Liberal Market Economies (LMEs) where firms face strong pressures to achieve short term goals, the combination of MEPs and CSR creates shareholder value, particularly when firms engage in internally oriented CSR projects. Conversely, in Coordinated Market Economies (CMEs) where institutions already curb short term demands, the combined adoption of MEPs and CSR initiatives destroys shareholder value, particularly when this CSR is external. Overall, our study enhances understanding of the institutional complementarity between corporate governance and CSR.  This study examines how two organizational practices, managerial entrenchment provisions (MEPs) and corporate social responsibility (CSR) combine between them to improve or reduce firms' financial success. Our analysis demonstrates that institutional framework has a strong influence on their combined effect. When the institutional context supports solutions to coordination problems among economic agents through market based arrangements, MEPs allow the implementation of strategies directed to promote long term investments and relationships. In this case, MEPs when paired with CSR allow generating intangibles that contribute to create shareholder value. Contrarily, in frameworks with coordination mechanisms based on nonmarket arrangements, the joint adoption of MEPs and CSR destroys value by increasing the power of managers and blockholders to extract rents at the expense of firms' minority shareholders.

title: Managerial Entrenchment and Shareholder Wealth Revisited: Theory and Evidence From a Recessionary Market
abstract: Does managerial entrenchment create or destroy shareholder value? This Article presents both theory and evidence that the answer to this question is not monolithic, but rather depends on factors that vary greatly with the macroeconomic climate, such as firm profitability, takeover frequency, and valuation of takeover premiums. The mainstream view, both of academics and market participants, is that entrenchment reduces accountability to shareholders and amplifies agency costs, thus decreasing shareholder wealth. Two influential studies (Bebchuk, Cohen Ferrell (2009) and Gompers, Ishii Metrick (2003) present empirical evidence consistent with this conclusion, finding statistically significant negative correlations between entrenchment and stock returns during the historic bull market of the 1990s. However, there is no a priori reason to conclude that these effects will persist. Rather, a close examination of first principles suggests that the benefits attributable to the market for corporate control are substantially minimized during recessions. Testing this hypothesis using data from the recent economic crisis, this Article finds that the previously identified, statistically significant correlations between high entrenchment and negative stock returns disappeared entirely during the recent financial crisis, even for the most and least entrenched companies. In fact, the opposite effect was observed: firms with above average levels of entrenchment outperformed less entrenched firms during the sample period. A portfolio buying firms with above average entrenchment while simultaneously shorting firms with below average entrenchment would have generated statistically Visiting Assistant Professor, Wake Forest University School of Law. The author is grateful to Guhan Subramanian, Robert Clark, Reinier Kraakman, Alan Palmiter, Ahmed Taha, Ron Wright, Wendy Parker, Jeff Lipshaw, and Gordon Smith for numerous helpful suggestions, discussions and critiques. The author would also like to thank Dori for her endless support, critical eye, and alternative point of view, and Riley for smiling. DO NOT DELETE 2/16/2011 12:55 PM BRIGHAM YOUNG UNIVERSITY LAW REVIEW 201

title: The impact of gender diversity on the relationship between managerial entrenchment and corporate social responsibility: evidence from UK companies
abstract: The purpose of this paper is to argue the relationship between managerial entrenchment (ME) corporate social responsibility (CSR) and gender diversity. Specifically, this paper aims to empirically examine the impact of board gender diversity (BGD) and gender diversity in top management teams (TMTs) on the relationship between ME and CSR.,This study uses panel data set of 300 UK companies listed during 2005 2017.,The results show that the positive relation between CSR and ME is more pronounced in companies where the level of women on the board is higher. However, women in TMT moderate this positive relationship.,Women in TMT may be less responsive to shareholders' preference for reduced company CSR concerns, but a higher percentage of women on the board can mitigate this effect.,This study suggests the dynamic relationship between CSR and ME.

title: The Influence of Managerial Entrenchment on Corporate Mergers and Acquisitions The Mediating Effect of Equity Concentration
abstract: Mergers and Acquisitions is one of the most important decisions in enterprise investment. An important M&A error often puts a company in trouble or even in the danger of bankruptcy. So, do managers' managerial entrenchment motives affect corporate M&A? In order to explore the relationship, this article uses the Shanghai and Shenzhen A share listed companies as a sample to empirically test the influence of managerial entrenchment on corporate M&A. The research shows that: (1)Managerial entrenchment has a significant inverted U type relationship with corporate M&A, which indicates that low managerial entrenchment promotes M&A and high managerial entrenchment inhibits M&A, and this relationship is more obvious in manufacturing and non state owned enterprises; (2)Equity concentration plays a mediating effect in the process of the influence of managerial entrenchment on corporate M&A.

title: M anagerial entrenchment, corporate social responsibility, and earnings management
abstract: Many studies have examined the direct relationship between the two corporate practices: corporate social responsibility (CSR) and earnings management (EM) however, the results remain heterogeneous. To achieve the consensus, this study builds upon the classical agency theory and examines the role of managerial entrenchment in creating organizational facades related to CSR and EM. More specifically, it examines the relationship between CSR performance and EM in the presence of managerial entrenchment and the direct effect of managerial entrenchment on CSR decoupling. In doing so, this article provides evidence of a previously underappreciated yet fundamentally important aspect, that is, managerial entrenchment, that may significantly affect the quality of earnings as well as the level of alignment between CSR disclosure and performance. Our analyses of longitudinal data of an international sample for the period of 2007 2016 supports that managerial entrenchment significantly moderates the relationship between CSR performance and EM. Furthermore, our study reveals that entrenched managers decouple CSR disclosure and performance.

title: The Effects of Corporate Characteristics on Managerial Entrenchment
abstract: The present study aims to assess the relationship between some corporate factors and managerial entrenchment in companies listed on the Tehran Stock  2011 2017. Panel data regression models were used to test the hypotheses. The obtained results indicated that four corporate factors, namely real earnings management, predictable earnings management, institutional ownership, and board independence have a significant relationship with the managerial entrenchment. In this study, the mixed index of managerial entrenchment is calculated using the principal component analysis based on four governance mechanisms of the percentage of shares available to the CEO, CEO duality, CEO compensation logarithm, and CEO tenure. This process has made the present study distinct from the previous ones, through which individual indexes were used for evaluating the entrenchment.

title: Pengaruh Komite Audit dan Managerial Entrenchment terhadap Agresivitas Pajak serta Implikasinya terhadap Kinerja Keuangan Perusahaan
abstract: This study aims to analyze the relationship between the audit committee and managerial entrenchment on tax aggressiveness and its implications for the company's financial performance. A total of 71 manufacturing companies on the Indonesian Stock Exchange during the 2015 2017 periode were research samples. The results of data analysis using Partial Least Square show that managerial entrenchment and tax aggressiveness have a significant negative effect on financial performance. Managerial entrenchment reduces the company's demand for monitoring of managers which results in a decrease in financial performance. Meanwhile, tax aggressiveness can cover managers' rent extraction actions that impact on declining financial performance.

title: CEO gender and managerial entrenchment
abstract: This paper investigates the effect of gender on managerial authority and control over firms. The study examines S&P 1500 firms for the period of 1999 2014. Our findings suggest that accounting performance, firm value, CEO age, firm age, and board size reduce the likelihood of appointing female managers. On the other hand, the appointment of female CEOs is directly associated with the percentage of female directors, board independence, and beta. The study confirms the notion that female CEO appointments are generally associated with firms facing adverse conditions, and shows that female CEOs are more entrenched as compared to male CEOs. We find that the presence of female CEO decreases the turnover performance sensitivity, increases the E index, and inflates CEO compensation. Our research suggests that the level of female CEOs' entrenchment provides them with greater job security, higher level of control, and inflated pay that compensate the risk of accepting the appointment in a high risk and poor performing firm.

title: The potential impact of managerial entrenchment on firms' corporate social responsibility activities and financial performance: evidence from Iran
abstract: PurposeThe present study aims to assess the effect of managerial entrenchment on firms' corporate social responsibility (CSR) activities and financial performance in Iran. Given that a total of 103 listed companies on the Tehran Stock Exchange are selected during 2012 2017. In this paper, return on assets (ROA) and Tobin's Q are the two variables to measure financial performance. results of hypotheses testing indicate that there is a positive and significant relationship between managerial entrenchment and financial performance based on the ROA and Tobin's Q indices, separately. Moreover, the results of this study indicate that there is also a positive and significant relationship between managerial entrenchment and CSR activities.valueThe current study almost is the first study, conducted in a developing country similar to Iran, and the provided results might be beneficial to other developing countries.