Managerial capital and firm types: findings from private bond contracts
Managerial capital and firm types: findings from private bond contracts
Field experiments have variously discovered that modern management practices enhance productivity, but not all firms adopt such practices. In this study, we examine private bond contracts used by the public house operators to explore if such variations are due to the differences in the types of the firms. Bond covenants make management actions in areas such as acquisitions and disposals contingent on meeting specified performance targets. We find that managed firms that provide greater flexibility in managing their operations are more responsive to these constraints than tenanted firms. The significant variations in the propensity of the firms to respond to covenant restrictions suggest that firms vary in their capacity to take different management actions.
firm types, managerial capital, bond covenants, acquisitions, disposals
592-595
Bouvier, Laurent
32a423b7-5a6f-485e-a54e-2616556e0773
Nisar, T.M.
6b1513b5-23d1-4151-8dd2-9f6eaa6ea3a6
13 September 2012
Bouvier, Laurent
32a423b7-5a6f-485e-a54e-2616556e0773
Nisar, T.M.
6b1513b5-23d1-4151-8dd2-9f6eaa6ea3a6
Bouvier, Laurent and Nisar, T.M.
(2012)
Managerial capital and firm types: findings from private bond contracts.
Applied Economics Letters, 20 (6), .
(doi:10.1080/13504851.2012.720009).
Abstract
Field experiments have variously discovered that modern management practices enhance productivity, but not all firms adopt such practices. In this study, we examine private bond contracts used by the public house operators to explore if such variations are due to the differences in the types of the firms. Bond covenants make management actions in areas such as acquisitions and disposals contingent on meeting specified performance targets. We find that managed firms that provide greater flexibility in managing their operations are more responsive to these constraints than tenanted firms. The significant variations in the propensity of the firms to respond to covenant restrictions suggest that firms vary in their capacity to take different management actions.
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Published date: 13 September 2012
Keywords:
firm types, managerial capital, bond covenants, acquisitions, disposals
Organisations:
Faculty of Business, Law and Art
Identifiers
Local EPrints ID: 343129
URI: http://eprints.soton.ac.uk/id/eprint/343129
ISSN: 1350-4851
PURE UUID: bbfaaa27-28f9-403b-8222-e3741d6fe60c
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Date deposited: 24 Sep 2012 15:41
Last modified: 15 Mar 2024 03:09
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Author:
Laurent Bouvier
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