Menu Expand

Cite JOURNAL ARTICLE

Style

Elsas, R., Löffler, Y. Universal Banks, Corporate Control, and Equity Carve-Outs in Germany. Credit and Capital Markets – Kredit und Kapital, 41(4), 557-587. https://doi.org/10.3790/kuk.41.4.557
Elsas, Ralf and Löffler, Yvonne "Universal Banks, Corporate Control, and Equity Carve-Outs in Germany" Credit and Capital Markets – Kredit und Kapital 41.4, 2008, 557-587. https://doi.org/10.3790/kuk.41.4.557
Elsas, Ralf/Löffler, Yvonne (2008): Universal Banks, Corporate Control, and Equity Carve-Outs in Germany, in: Credit and Capital Markets – Kredit und Kapital, vol. 41, iss. 4, 557-587, [online] https://doi.org/10.3790/kuk.41.4.557

Format

Universal Banks, Corporate Control, and Equity Carve-Outs in Germany

Elsas, Ralf | Löffler, Yvonne

Credit and Capital Markets – Kredit und Kapital, Vol. 41 (2008), Iss. 4 : pp. 557–587

3 Citations (CrossRef)

Additional Information

Article Details

Author Details

Prof. Dr. Ralf Elsas, Ludwig-Maximilians-Universität München, Institut für Finance und Banking, Ludwigstraße 28, D-80539 München.

Yvonne Löffler, Humboldt-Universität zu Berlin, Unter den Linden 6, D-10099 Berlin.

Cited By

  1. Determinanten der Vorstandsvergütung

    Rapp, Marc Steffen | Wolff, Michael

    Zeitschrift für Betriebswirtschaft, Vol. 80 (2010), Iss. 10 P.1075

    https://doi.org/10.1007/s11573-010-0395-x [Citations: 28]
  2. The valuation effects of equity carve-outs

    Sun, Meijui | Shu, Pei-Gi

    Applied Economics Letters, Vol. 18 (2011), Iss. 9 P.887

    https://doi.org/10.1080/13504851.2010.515196 [Citations: 2]
  3. New evidence on value creation through hedge fund activism: A qualitative comparative analysis

    Ben Arfa, Nouha | Ammari, Aymen | Boussaada, Rim

    Strategic Change, Vol. 29 (2020), Iss. 6 P.681

    https://doi.org/10.1002/jsc.2373 [Citations: 0]

Abstract

Universal Banks, Corporate Control, and Equity Carve-Outs in Germany

This paper analyzes value effects of changes in the governance structure of German firms due to equity carve-outs.

Our main conjecture is that the degree of pre-event corporate control affects market reactions to the announcement of carve-outs. We test two contradictory implications. If less control of management leads to less efficiently managed firms, in particular these firms will benefit the most from a change in the governance structure. On the other hand, if tight control of management ensures a more efficient use of the carve-out proceeds, firms more subject to corporate control will have higher abnormal returns.

Our evidence clearly supports the first prediction. We find that a higher degree of pre-event ownership concentration leads to lower abnormal returns. We find evidence consistent with an active role of banks in disciplining management, but this does not go beyond what non-financial blockholders achieve, although we explicitly take into account direct equity stakes, proxy-voting rights, and supervisory board representation of banks. (JEL G21, G32)