Comment on ‘Matching Organizational Structure with Firm Attributes: A study of Master Limited Partnerships’ Claudio Loderer Claudio Loderer Search for other works by this author on: Oxford Academic Google Scholar Review of Finance, Volume 1, Issue 2, 1997, Pages 193–196, https://doi.org/10.1023/A:1009792007996 Published: 01 August 1997

This paper tests whether the higher oil prices of the last decade could have been the result of producer collusion. We find little evidence that OPEC influenced oil prices during the years of skyrocketing prices (1974–1980), but there is evidence that it did so during the recent years of softening prices (1981–1983).

ABSTRACT This paper tests whether the higher oil prices of the last decade could have been the result of producer collusion. We find little evidence that OPEC influenced oil prices during the years of skyrocketing prices (1974–1980), but there is evidence that it did so during the recent years of softening prices (1981–1983).

Abstract Although growth opportunities fade and profitability declines as firms mature, older firms are no more likely to be acquired than young firms are. This article documents and explains that phenomenon. We argue that, because mature organizations are rationally less flexible, they are more costly to integrate and therefore comparatively unattractive acquisition candidates. The evidence supports this explanation of the negative age dependence of takeover hazard. The evidence also shows that negative exogenous shocks to merger benefits further reduce the takeover hazard of mature firms. We test many alternative explanations and find no evidence that they can explain the hazard decline.

We examine the relation between managers' financial interests and firm performance. Since the relation could go in either direction, we cast the analysis in a simultaneous equations framework. For firms involved in acquisitions, we find that acquisition performance and Tobin's Q ratios affect the size of managers' stockholdings. We find no evidence, however, that larger stockholdings lead to better performance. Perhaps management is effectively disciplined by competition in product and labor markets. Alternatively, it may not be necessary for top executives to own stock to be residual claimants. And finally, higher ownership might multiply the opportunities to appropriate corporate wealth.

The question of whether the design of the corporate executive pay package reflects an attempt to reduce agency costs between shareholders and managers is addressed. The components of senior executive pay are found to vary systematically across firms in a manner that cannot easily be explained by tax effects, and which would indicate that individual elements of pay are aimed at controlling for limited horizon and risk exposure problems. Managerial decisions and the structure of managerial pay therefore appear to be interrelated.

This paper investigates whether managers rely on dividends to obtain a higher price in a stock offering and whether the stock price reaction to dividend and offering announcements justifies such a coordination. The evidence does not support either conjecture. Issuing firms are not more likely to pay or increase dividends than nonissuing firms. Moreover, there is little evidence that firms time stock-offering announcements right after dividend declarations to benefit from the attendant information disclosure. The analysis of dividend and stock-offering announcement effects suggests few if any benefits from linking dividend and stock-offering announcements.

ABSTRACT We investigate whether insiders of bankrupt firms hold less stock or reduce their stockholdings compared to what we observed for insiders of similar firms that do not go bankrupt. We find little evidence of such time‐series and cross‐sectional differences in spite of the fact that the stock value of bankrupt firms falls by more than ninety percent in the five years preceding bankruptcy. One implication of our results is that the amount of stock owned and the magnitude of the trades undertaken by corporate insiders of both bankrupt and nonbankrupt firms appear to provide no information about firm value.

Failure to correct for pension risk leads to upward-biased discount rate estimates in firms with pension risk exposure. The result is a negative and economically significant relation between pension risk and corporate investment. The effect is confined to investment decisions that require discount rate estimates. Moreover, it is stronger if project value is more sensitive to such estimates. Because of this bias, firms miss valuable investment opportunities. The results survive robustness tests that address endogeneity concerns and alternative interpretations of the evidence. The general implication is that non-operating risks can distort, if ignored, corporate investment decisions.