Conference Agenda

Please note that all times are shown in the time zone of the conference. The current conference time is: 1st Nov 2024, 12:41:52am CET

 
 
Session Overview
Session
CF 06: Shareholders and Corporate Outcomes
Time:
Thursday, 17/Aug/2023:
1:30pm - 3:00pm

Session Chair: Mariassunta Giannetti, Stockholm School of Economics
Location: 4A-00 (floor 4)


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Presentations
ID: 267

The Golden Revolving Door: Hedging through Hiring Government Officials

Ling Cen1, Lauren Cohen2, Jing Wu1, Fan Zhang1

1Chinese University of Hong Kong, Hong Kong S.A.R. (China); 2Harvard University - Business School (HBS); National Bureau of Economic Research (NBER)

Discussant: Nandini Gupta (Indiana University)

Using both the onset of the US-China trade war in 2018 and the most recent Russia-Ukraine conflict and associated trade tensions, we show that government-linked firms increase their importing activity by roughly 33% (t=4.01) following the shock, while non-government linked firms trading to the same countries do the opposite, decreasing activity. These increases appear targeted, in that we see no increase for government-linked supplier firms generally to other countries (even countries in the same regions) at the same time, nor of these same firms in these regions at other times of no tension. In terms of mechanism, government supplier-linked firms are nearly twice as likely to receive tariff exemptions as equivalent firms doing trade in the region who are not also government suppliers. More broadly, these effects are increasing in level of government connection. For example, firms that are geographically closer to the agencies to which they supply increase their imports more acutely. Using micro-level data, we find that government supplying firms that recruit more employees with past government work experience also increase their importing activity more – particularly when the past employee worked in a contracting role. Lastly, we find evidence that this results in sizable accrued benefits in terms of firm-level profitability, market share gains, and outsized stock returns.

EFA2023_267_CF 06_1_The Golden Revolving Door.pdf


ID: 1427

Private Equity in the Hospital Industry

Yongseok Kim1, Merih Sevilir2, Janet Gao3

1Indiana University Bloomington, United States of America; 2Halle Institute (IWH), Germany; 3Georgetown University, United States of America

Discussant: Tania Babina (Columbia Business School; NBER)

We examine the survival, profitability, and employment profiles of private equity (PE) acquired hospitals. Target hospitals sustain their survival rates and improve in profitability. Although employment and wage expenditures substantially decline, the effect differs across employee types: The decline in core medical workers is short-lived, while the decline in administrative workers and their wages persists. These changes are more pronounced for nonprofit targets, and targets acquired into larger systems, and PEs with healthcare industry expertise. We do not find patient outcomes to worsen at acquired hospitals. Our results suggest that PE acquirers improve hospitals’ operational efficiency without compromising healthcare quality.

EFA2023_1427_CF 06_2_Private Equity in the Hospital Industry.pdf


ID: 2003

Voting Rationales

Roni Michaely1, Silvina Rubio2, Irene Yi3

1University of Hong Kong; 2University of Bristol; 3University of Toronto

Discussant: Nickolay Gantchev (University of Warwick)

We examine why institutional investors vote the way they vote on director elections, using a novel dataset on voting rationales provided by institutional investors. We find that the most important reasons for opposing directors are board independence, board diversity, tenure, firm governance, and busyness; institutional investors are also increasingly voting against directors to hold them accountable for failure to address environmental and social issues. We find that institutional investors' concerns are well-grounded: companies with low board gender diversity receive more rationales on board diversity, similar for companies with long director tenure and busy directors. This is consistent with institutional investors devoting significant effort toward governance research. Finally, companies with high dissent voting related to board diversity, tenure, and busyness improve their board composition in the following year. Our results suggest that directors are willing to address concerns that result in high shareholder dissent, and voting rationales can be an effective tool to communicate the source of dissent.

EFA2023_2003_CF 06_3_Voting Rationales.pdf