TY - JOUR
T1 - Managerial innovation incentives, management buyouts, and shareholders' intolerance of failure
AU - Kamoto, Shinsuke
N1 - Funding Information:
I would like to thank Jeffry Netter (the Editor), an anonymous referee, Alberto Pezzi, participants at 3rd European Business Research Conference (Rome, 2014), and Gregory Zunic for their valuable comments and suggestions. The financial support from JSPS Grant-in-Aid for Scientific Research (No. 23730353 and No. 16K03811 ) is gratefully acknowledged.
Publisher Copyright:
© 2016 Elsevier B.V.
PY - 2017/2/1
Y1 - 2017/2/1
N2 - This study demonstrates that, apart from managerial agency problem, shareholders' intolerance of failure also deteriorates managerial innovation incentives in public firms. Furthermore, management buyouts improve the innovation intensity, even if managers gain no excess value from the buyouts in collaboration with private equity firms. The study provides insights into the interrelation between firms' innovation, corporate governance, and dividend policy. It presents a rationale behind empirical evidence of a positive relationship between management buyouts and innovation intensity. It provides empirical implications on firms' characteristics that facilitate management buyouts and the return and risk structure of private equity firms.
AB - This study demonstrates that, apart from managerial agency problem, shareholders' intolerance of failure also deteriorates managerial innovation incentives in public firms. Furthermore, management buyouts improve the innovation intensity, even if managers gain no excess value from the buyouts in collaboration with private equity firms. The study provides insights into the interrelation between firms' innovation, corporate governance, and dividend policy. It presents a rationale behind empirical evidence of a positive relationship between management buyouts and innovation intensity. It provides empirical implications on firms' characteristics that facilitate management buyouts and the return and risk structure of private equity firms.
KW - Corporate governance
KW - Innovation
KW - Investors' sophistication
KW - Management buyouts
KW - Managerial opportunism
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U2 - 10.1016/j.jcorpfin.2016.11.002
DO - 10.1016/j.jcorpfin.2016.11.002
M3 - Article
AN - SCOPUS:84995777901
SN - 0929-1199
VL - 42
SP - 55
EP - 74
JO - Journal of Corporate Finance
JF - Journal of Corporate Finance
ER -