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Interest alignment and firm performance

Author

Listed:
  • Gottschalg, Oliver
  • Meier, Degenhard

Abstract

This study derives testable hypotheses from their framework and thus provides an empirical test of interest alignment theory based on a sample of 69 management buyouts in the UK. The results of the multivariate regression model suggest that in this setting, interest alignment does have a significant influence on firm performance.

Suggested Citation

  • Gottschalg, Oliver & Meier, Degenhard, 2005. "Interest alignment and firm performance," HEC Research Papers Series 825, HEC Paris.
    • Handle: RePEc:ebg:heccah:0825
    as

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    References listed on IDEAS

    as
    1. Oliver Gottschalg & Achim Berg, 2005. "Understanding value generation in buyouts," Post-Print hal-00458714, HAL.
    2. Canice Prendergast, 1999. "The Provision of Incentives in Firms," Journal of Economic Literature, American Economic Association, vol. 37(1), pages 7-63, March.
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    5. Jensen, Michael C, 1986. "Agency Costs of Free Cash Flow, Corporate Finance, and Takeovers," American Economic Review, American Economic Association, vol. 76(2), pages 323-329, May.
    6. Ludovic Phalippou & Oliver Gottschalg, 2009. "The Performance of Private Equity Funds," The Review of Financial Studies, Society for Financial Studies, vol. 22(4), pages 1747-1776, April.
    7. Kaplan, Steven, 1989. "The effects of management buyouts on operating performance and value," Journal of Financial Economics, Elsevier, vol. 24(2), pages 217-254.
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    9. Cotter, James F. & Peck, Sarah W., 2001. "The structure of debt and active equity investors: The case of the buyout specialist," Journal of Financial Economics, Elsevier, vol. 59(1), pages 101-147, January.
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    competitive advantage; interest alignment; motivation; buyouts;
    All these keywords.

    JEL classification:

    • M10 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - General

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