Roberto Barontini - Academia.edu (original) (raw)
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Papers by Roberto Barontini
Entrepreneurship Theory and Practice
Growth is important for the long-term success of a business. Regrettably, the impact of family in... more Growth is important for the long-term success of a business. Regrettably, the impact of family influence on firm growth is largely neglected. We examine whether family firms have a higher growth rate than their nonfamily counterparts. Based on a large sample of firms across 43 countries over a 10-year period, we show that family firms on average have higher growth rates than nonfamily firms, and this positive effect is greater for family firms operating in strong national institutional environments which are less corrupt, more democratic, more subject to rule of law, and have effective government policies. We also find that the positive effect of family influence on firm growth varies significantly across different types of family firms and different business cycles. These findings show that family control has an economically significant impact on growth rates and important implications for both family firm theory and practice.
Journal of Economics and Business
Academy of Management Proceedings
Business Strategy and the Environment
Corporate Ownership and Control, 2017
This paper investigates the relationship between investor protection and CEO pay in family-contro... more This paper investigates the relationship between investor protection and CEO pay in family-controlled corporations. Using a panel of 986 firm-year observations from 11 EU countries, we show that the lower the investor protection, the higher the compensation of the CEO. The sensitivity of pay to the institutional context is higher for a family CEO than a professional CEO, a result that corroborates the hypothesis that CEO compensation contracts in family firms are influenced by familiar connections. Overall, these results are more consistent with the hypothesis of rent extraction than with the perspective of optimal remuneration contracts.
Journal of Management & Governance, 2016
Journal of Cleaner Production, 2017
SSRN Electronic Journal, 2000
Economia E Politica Industriale, 2006
... gestione, grazie al qua-le le famiglie hanno la possibilità sia di creare valore, sia di estr... more ... gestione, grazie al qua-le le famiglie hanno la possibilità sia di creare valore, sia di estrarre benefici privati ai danni degli azionisti di ... e Reeb, analizzando dettagliatamente l'effetto di tre carat-teri fondamentali del controllo di tipo familiare: l'entità della proprietà sui cash flow, il ...
Journal of Management Governance, Nov 24, 2009
This paper investigates the determinants of executive compensation in Italian listed companies ov... more This paper investigates the determinants of executive compensation in Italian listed companies over the period 1995-2002. Using a unique database, with yearly data on executive pay and very detailed information on companies' ownership structures, we explore the impact of performance and corporate governance characteristics on Board compensation. We find that the level of board compensation is significantly affected, as expected, by the size of the firm, accounting returns and market valuation. High ownership concentration is associated with lower executive pay, according to the hypothesis that strong ultimate shareholders have an higher incentive either to monitor the management, and not to extract private benefits via excessive personal compensation. Quite surprisingly, the wedge between cash flow and voting rights seem to exert a negative impact on the level of compensation; control enhancing devices could increase agency costs, but do not seem to induce the extraction of higher board compensation. Looking at the nature of the ultimate owner, the level of Board compensation is higher for family firms, and with a lesser extent, for Widely Held firms; managers of State owned companies receive a significantly lower compensation. Furthermore, within family firms, executive compensation is higher in founder-controlled corporations, while in firms controlled by descendants board remuneration seems very close to widely held firms. Taking into account the compensation received by every board member, emerge that family firms pay higher compensation both for executives and non executive directors. For CEOs cash compensation seem more related to performance and company valuation than other board positions, while president-often a family member-compensation is less related to ownership concentration and performance characteristics. Within family firms, directors that are members of the controlling family obtain usually higher compensation, but not for CEO role.
ABSTRACT In this paper we measure the impact of recent reforms on directors’ remuneration by comp... more ABSTRACT In this paper we measure the impact of recent reforms on directors’ remuneration by comparing the remuneration practices at large European listed companies before and after the financial crisis. We analyse the data concerning directors’ remuneration at FTSE Eurofirst 300 Index companies and assess to what extent the changes occurred between 2007 and 2010 reflect the economic crisis determined by the 2008 financial turmoil and the remuneration reforms generated by the same. Our analysis reveals that country-specific characteristics such as corporate governance, firm ownership, and the nature and quality of the legal system still have a relevant impact on the level and structure of directors’ pay.Section I briefly connects our work with previous studies in this area, while section II introduces some core aspects of recent EU and national reforms. In section III, we analyse the data concerning remuneration governance and disclosure, and show that all firms have experienced improvements. However, variations persist reflecting national regulations and practices. Moreover, companies with more dispersed ownership tend to comply better with remuneration governance and disclosure requirements. Our data confirm and extend to Europe theoretical predictions and previous country-specific empirical evidence about the impact of ownership concentration on remuneration governance and disclosure. In section IV, we analyse pay structure and levels. We measure the level of total compensation, the variable component including the estimated value of annual stock grants and stock options. The evolution of total compensation between 2007 and 2010 reveals that pay practices are permeable to the effect of the financial crisis. Board total compensation decreases in most European countries. However, significant differences emerge between financial and non-financial companies, with board compensation at financial firms decreasing rather significantly, while non-financial firms experience less relevant changes. Also the CEO compensation level and structure significantly changed in 2010 relative to 2007, mainly as a result of the reduction in variable cash compensation. This is partly due to the negative performance of firms in 2010. However, our results show that these changes may be also related to other factors, in particular the regulatory pressure on financial firms in the relevant period. Indeed, several items in the pay structure of financial firms go in the direction indicated by regulators, i.e. better focus on the risk implications of pay, appropriate balance between variable and fixed compensation, and a substantial portion of variable compensation awarded in shares or share-linked instruments. Section V concludes by advancing some policy suggestions.
SSRN Electronic Journal, 2000
ABSTRACT We relate stock returns and asset values of closely held Italian listed companies to a m... more ABSTRACT We relate stock returns and asset values of closely held Italian listed companies to a measure of the risk of expropriation faced by minority shareholders. The risk of expropriation is measured using proxies for the power and the incentive to divert resources from the company by the controlling shareholder. We find that a high risk of expropriation does not affect stock returns, while it has a quite strong negative impact on firm value when the ultimate owner is either the State or a family. These evidences are consistent with the model of Jensen and Meckling (1976), suggesting that rational investors require a price discount when they buy stocks issued by closely held companies whose controlling shareholder has both the power and the incentive to divert resources from the firm, and that, in equilibrium, the price discount is large enough to compensate for the expected diversion. These results have important policy implications, as they indicate that disclosure rules on ownership and governance structures are the only measures that really matter for investor protection, while statutory provisions that restrict companies freedom in choosing the desired ownership structure (through pyramiding or issuing of non voting shares) are at best useless.
SSRN Electronic Journal, 2000
Sxi — Springer per l’Innovazione / Sxi — Springer for Innovation, 2011
L'emergere della scienza dei servizi offre nuovi e rinnovati interessi di ricerca al... more L'emergere della scienza dei servizi offre nuovi e rinnovati interessi di ricerca al management accounting ed al performance management. Sul versante del management accounting, le prospettive della co-creazione di valore e della servitization spingono verso oggetti di analisi che considerano maggiormente il cliente. Secondariamente la tendenziale dissociazione tra investimenti (costi) e fonti dei ricavi mette in dubbio la validità della tradizionale logica del costing for pricing nel contesta della service science. Infine si ...
Entrepreneurship Theory and Practice
Growth is important for the long-term success of a business. Regrettably, the impact of family in... more Growth is important for the long-term success of a business. Regrettably, the impact of family influence on firm growth is largely neglected. We examine whether family firms have a higher growth rate than their nonfamily counterparts. Based on a large sample of firms across 43 countries over a 10-year period, we show that family firms on average have higher growth rates than nonfamily firms, and this positive effect is greater for family firms operating in strong national institutional environments which are less corrupt, more democratic, more subject to rule of law, and have effective government policies. We also find that the positive effect of family influence on firm growth varies significantly across different types of family firms and different business cycles. These findings show that family control has an economically significant impact on growth rates and important implications for both family firm theory and practice.
Journal of Economics and Business
Academy of Management Proceedings
Business Strategy and the Environment
Corporate Ownership and Control, 2017
This paper investigates the relationship between investor protection and CEO pay in family-contro... more This paper investigates the relationship between investor protection and CEO pay in family-controlled corporations. Using a panel of 986 firm-year observations from 11 EU countries, we show that the lower the investor protection, the higher the compensation of the CEO. The sensitivity of pay to the institutional context is higher for a family CEO than a professional CEO, a result that corroborates the hypothesis that CEO compensation contracts in family firms are influenced by familiar connections. Overall, these results are more consistent with the hypothesis of rent extraction than with the perspective of optimal remuneration contracts.
Journal of Management & Governance, 2016
Journal of Cleaner Production, 2017
SSRN Electronic Journal, 2000
Economia E Politica Industriale, 2006
... gestione, grazie al qua-le le famiglie hanno la possibilità sia di creare valore, sia di estr... more ... gestione, grazie al qua-le le famiglie hanno la possibilità sia di creare valore, sia di estrarre benefici privati ai danni degli azionisti di ... e Reeb, analizzando dettagliatamente l'effetto di tre carat-teri fondamentali del controllo di tipo familiare: l'entità della proprietà sui cash flow, il ...
Journal of Management Governance, Nov 24, 2009
This paper investigates the determinants of executive compensation in Italian listed companies ov... more This paper investigates the determinants of executive compensation in Italian listed companies over the period 1995-2002. Using a unique database, with yearly data on executive pay and very detailed information on companies' ownership structures, we explore the impact of performance and corporate governance characteristics on Board compensation. We find that the level of board compensation is significantly affected, as expected, by the size of the firm, accounting returns and market valuation. High ownership concentration is associated with lower executive pay, according to the hypothesis that strong ultimate shareholders have an higher incentive either to monitor the management, and not to extract private benefits via excessive personal compensation. Quite surprisingly, the wedge between cash flow and voting rights seem to exert a negative impact on the level of compensation; control enhancing devices could increase agency costs, but do not seem to induce the extraction of higher board compensation. Looking at the nature of the ultimate owner, the level of Board compensation is higher for family firms, and with a lesser extent, for Widely Held firms; managers of State owned companies receive a significantly lower compensation. Furthermore, within family firms, executive compensation is higher in founder-controlled corporations, while in firms controlled by descendants board remuneration seems very close to widely held firms. Taking into account the compensation received by every board member, emerge that family firms pay higher compensation both for executives and non executive directors. For CEOs cash compensation seem more related to performance and company valuation than other board positions, while president-often a family member-compensation is less related to ownership concentration and performance characteristics. Within family firms, directors that are members of the controlling family obtain usually higher compensation, but not for CEO role.
ABSTRACT In this paper we measure the impact of recent reforms on directors’ remuneration by comp... more ABSTRACT In this paper we measure the impact of recent reforms on directors’ remuneration by comparing the remuneration practices at large European listed companies before and after the financial crisis. We analyse the data concerning directors’ remuneration at FTSE Eurofirst 300 Index companies and assess to what extent the changes occurred between 2007 and 2010 reflect the economic crisis determined by the 2008 financial turmoil and the remuneration reforms generated by the same. Our analysis reveals that country-specific characteristics such as corporate governance, firm ownership, and the nature and quality of the legal system still have a relevant impact on the level and structure of directors’ pay.Section I briefly connects our work with previous studies in this area, while section II introduces some core aspects of recent EU and national reforms. In section III, we analyse the data concerning remuneration governance and disclosure, and show that all firms have experienced improvements. However, variations persist reflecting national regulations and practices. Moreover, companies with more dispersed ownership tend to comply better with remuneration governance and disclosure requirements. Our data confirm and extend to Europe theoretical predictions and previous country-specific empirical evidence about the impact of ownership concentration on remuneration governance and disclosure. In section IV, we analyse pay structure and levels. We measure the level of total compensation, the variable component including the estimated value of annual stock grants and stock options. The evolution of total compensation between 2007 and 2010 reveals that pay practices are permeable to the effect of the financial crisis. Board total compensation decreases in most European countries. However, significant differences emerge between financial and non-financial companies, with board compensation at financial firms decreasing rather significantly, while non-financial firms experience less relevant changes. Also the CEO compensation level and structure significantly changed in 2010 relative to 2007, mainly as a result of the reduction in variable cash compensation. This is partly due to the negative performance of firms in 2010. However, our results show that these changes may be also related to other factors, in particular the regulatory pressure on financial firms in the relevant period. Indeed, several items in the pay structure of financial firms go in the direction indicated by regulators, i.e. better focus on the risk implications of pay, appropriate balance between variable and fixed compensation, and a substantial portion of variable compensation awarded in shares or share-linked instruments. Section V concludes by advancing some policy suggestions.
SSRN Electronic Journal, 2000
ABSTRACT We relate stock returns and asset values of closely held Italian listed companies to a m... more ABSTRACT We relate stock returns and asset values of closely held Italian listed companies to a measure of the risk of expropriation faced by minority shareholders. The risk of expropriation is measured using proxies for the power and the incentive to divert resources from the company by the controlling shareholder. We find that a high risk of expropriation does not affect stock returns, while it has a quite strong negative impact on firm value when the ultimate owner is either the State or a family. These evidences are consistent with the model of Jensen and Meckling (1976), suggesting that rational investors require a price discount when they buy stocks issued by closely held companies whose controlling shareholder has both the power and the incentive to divert resources from the firm, and that, in equilibrium, the price discount is large enough to compensate for the expected diversion. These results have important policy implications, as they indicate that disclosure rules on ownership and governance structures are the only measures that really matter for investor protection, while statutory provisions that restrict companies freedom in choosing the desired ownership structure (through pyramiding or issuing of non voting shares) are at best useless.
SSRN Electronic Journal, 2000
Sxi — Springer per l’Innovazione / Sxi — Springer for Innovation, 2011
L'emergere della scienza dei servizi offre nuovi e rinnovati interessi di ricerca al... more L'emergere della scienza dei servizi offre nuovi e rinnovati interessi di ricerca al management accounting ed al performance management. Sul versante del management accounting, le prospettive della co-creazione di valore e della servitization spingono verso oggetti di analisi che considerano maggiormente il cliente. Secondariamente la tendenziale dissociazione tra investimenti (costi) e fonti dei ricavi mette in dubbio la validità della tradizionale logica del costing for pricing nel contesta della service science. Infine si ...