Corporate Governance in Small and Medium-Sized Firms Edited by David B. Audretsch Distinguished Professor and Ameritech Chair of Economic Development Indiana University, Bloomington, USA and Visiting Professor, King Saud University, Riad, Saudi Arabia and ErikE.Lehmann Professor of Management and Organization University of Augsburg, Germany THE INTERNATIONAL LIBRARY OF ENTREPRENEURSHIP An Elgar Research Collection Cheltenham, UK Northampton, MA, USA
Contents Acknowledgements Introduction David B. Audretsch and Erik E. Lehmann ix xiii PART I CORPORATE GOVERNANCE: THEORY AND CONCEPTS A Governance Theory 1. Michael C. Jensen and William H. Meckling (1976), 'Theory of the Firm: Managerial Behavior, Agency Costs, and Ownership Structure', Journal of Financial Economics, 3,305-60, reset 5 2. Eugene F. Fama and Michael C. Jensen (1983), 'Separation of Ownership and Control', Journal of Law and Economics, XXVI (2), June, 301-25 54 3. Harold Demsetz (1983), 'The Structure of Ownership and the Theory of the Firm', Journal of Law and Economics, XXVI (2), June, 375-90 79 4. Henry G. Manne (1965), 'Mergers and the Market for Corporate Control', Journal of Political Economy, 73 (2), April, 110-20 95 5. Eugene F. Fama (1980), 'Agency Problems and the Theory of the Firm', Journal of Political Economy, 88 (2), April, 288-307 106 6. Raghuram G. Raj an and Luigi Zingales (2000), 'The Governance of the New Enterprise', in Xavier Vives (ed.), Corporate Governance: Theoretical and Empirical Perspectives, Cambridge UK: Cambridge University Press, Chapter 6,201-27 126 B Governance Concepts 7. Diane K. Denis (2001), 'Twenty-five Years of Corporate Governance Research... and Counting', Review of Financial Economics, 10, 191-212 155 8. Lorraine Uhlaner, Mike Wright and Morten Huse (2007), 'Private Firms and Corporate Governance: An Integrated Economic and Management Perspective', Small Business Economics, 29,225^11 177 9. Peter G. Klein (1999), 'Entrepreneurship and Corporate Governance', Quarterly Journal of Austrian Economics, 2 (2), Summer, 19^2 194 10. Catherine M. Daily, Patricia P. McDougall, Jeffrey G. Covin and Dan R. Dalton (2002), 'Governance and Strategic Leadership in Entrepreneurial Firms', Journal of Management, 28 (3), 387^-12 218
11. Thomas M. Zellweger, Kimberly A. Eddleston and Franz W. Kellermanns (2010), 'Exploring the Concept of Familiness: Introducing Family Firm Identity', Journal of Family Business Strategy, 1, 54-63 244 12. James J. Chrisman, Jess H. Chua, Franz W. Kellermanns and Erick P.C. Chang (2007), 'Are Family Managers Agents or Stewards? An )Exploratory Study in Privately Held Family Firms', Journal of Business Research, 60,1030-38 254 13. Wayne H. Stewart, Jr., Warren E. Watson, Joann C. Carland and James W. Carland (1998), 'A Proclivity for Entrepreneurship: A Comparison of Entrepreneurs, Small Business Owners, and Corporate Managers', Journal of Business Venturing, 14,189-214 263 PART II MANAGERIAL OWNERSHIP IN SME 14. Theresa M. Welbourne and Linda A. Cyr (1999),' Using Ownership as an Incentive: Does the "Too Many Chiefs" Rule Apply in Entrepreneurial Firms?', Group and Organizational Management, 1A (4), December, 438-60 291 15. Randolph P. Beatty and Edward J. Zajac (1994), 'Managerial Incentives, Monitoring, and Risk Bearing: A Study of Executive Compensation, Ownership, and Board Structure in Initial Public Offerings', Administrative Science Quarterly, 39 (2), June, 313-35 314 16. Erik E. Lehmann (2006),'Corporate Governance in New Enterprises or: Why Do Some CEOs Hold Large Equity Stakes While Others Are Paid Through Stock Options?', Zeitschrift fur Betriebswirtschaft, 5,21-37 337 PART III MARKET MECHANISMS: PRODUCT MARKET COMPETITION, MARKET FOR CORPORATE CONTROL AND MARKET FOR MANAGERS A The Product Market 17. Marc Cowling (2003), 'Productivity and Corporate Governance in Smaller Finns', Small Business Economics, 20, 335-44 359 18. Trond Rand0y, Clay Dibrell and Justin B. Craig (2009), 'Founding Family Leadership and Industry Profitability', Small Business Economics, 32 (4), April, 397^07 369 B The Market for Corporate Control 19. Damiano Bonardo, Stefano Paleari and Silvio Vismara (2010), 'The M&A Dynamics of European Science-based Entrepreneurial Firms', Journal of Technology Transfer, 35,141-80 383
20. Jung-Chin Shen and Jeffrey J. Reuer (2005), 'Adverse Selection in Acquisitions of Small Manufacturing Firms: A Comparison of Private and Public Targets', Small Business Economics, 24, 393^-07 423 C The Market for Managers 21. C. Mirjam van Praag (2003), 'Business Survival and Success of Young Small Business Owners', Small Business Economics, 21, 1-17 441 22. Pramodita Sharma, James J. Chrisman and Jess H. Chua (2003), 'Predictors of Satisfaction with the Succession Process in Family Finns', Journal of Business Venturing, 18, 667-87 458 PART IV INSTITUTIONAL MECHANISMS: BOARD OF DIRECTORS AND LARGE SHAREHOLDERS A The Role of Boards in SME 23. Benjamin E. Hermann and Michael S. Weisbach (2003), 'Boards of Directors as an Endogenously Determined Institution: A Survey of the Economic Literature', FRBNYEconomic Policy Review, April, 7-26 483 24. Morten Huse (1990), 'Board Composition in Small Enterprises', Entrepreneurship and Regional Development, 2 (4), 363-73 503 25. Morten Huse (2000), 'Boards of Directors in SMEs: A Review and Research Agenda', Entrepreneurship and Regional Development, 12 (4), 271-90 514 26. Catherine M. Daily and Dan R. Dalton (1992),' The Relationship Between Governance Structure and Corporate Performance in Entrepreneurial Firms', Journal of Business Venturing, 7, 375-86 534 27. Bart Clarysse, Mirjam Knockaert and Andy Lockett (2007), 'Outside Board Members in High Tech Start-ups', Small Business Economics, 29,243-59 546 28. Olof Brunninge, Mattias Nordqvist and Johan Wiklund (2007), 'Corporate Governance and Strategic Change in SMEs: The Effects of Ownership, Board Composition and Top Management Teams', Small Business Economics, 29, 295-308 563 29. Alessandro Minichilli and Cathrine Hansen (2007), 'The Board Advisory Tasks in Small Firms and the Event of Crises', Journal of Management and Governance, 11 (1), March, 5-22 577 30. Kevin Keasey, Helen Short and Robert Watson (1994),' Directors' Ownership and the Performance of Small and Medium Sized Firms in the UK', Small Business Economics, 6,225-36 595
B The Role and Influence of Large Shareholders 31. Lloyd Steier (2003), 'Variants of Agency Contracts in Familyfinanced Ventures as a Continuum of Familial Altruistic and Market Rationalities', Journal of Business Venturing, 18,597-618 609 32. David B. Audretsch and Julie A. Elston (1997), 'Financing the German Mittelstand 1, Small Business Economics, 9,97-110 631 33. Steven N. Kaplan and Per Stromberg (2001), 'Venture Capitalists as Principals: Contracting, Screening, and Monitoring', American Economic Review, 91 (2), May, 426-30 645 PART V CORPORATE GOVERNANCE FROM ADOLESCENCE TO MATURITY 34. Malcolm Baker and Paul A. Gompers (2003), 'The Determinants of Board Structure at the Initial Public Offering', Journal of Law and Economics, XLVI (2), October, 569-98 653 35. David B. Audretsch and Erik E. Lehmann (2005), 'The Effects of Experience, Ownership, and Knowledge on IPO Survival: Empirical Evidence from Germany', Review of Accounting and Finance, 4 (4), 13-33 683 36. Mike Wright, Robert E. Hoskisson, Lowell W. Busenitz and Jay Dial (2000), 'Entrepreneurial Growth Through Privatization: The Upside of Management Buyouts', Academy of Management Review, 25 (3), July, 591-601 704 37. Matthew D. Lynall, Brian R. Golden and Amy J. Hillman (2003), 'Board Composition from Adolescence to Maturity: A Multitheoretic View', Academy of Management Review, 28 (3), July, 416-31 715