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Finance and Economics Discussion Series
The Finance and Economics Discussion Series logo links to FEDS home page The Effect of Changes in Ownership Structure on Performance: Evidence from the Thrift Industry
Rebel A. Cole and Hamid Mehran

Abstract: Restrictions on the ownership structure of a public company may harm the company's performance by preventing owners from choosing the best structure. We examine the stock-price performance and ownership structure, before and after the expiration of anti-takeover regulations, of a sample of thrift institutions that converted from mutual to stock ownership. We find that after the anti-takeover provisions expire, firm performance improves significantly, and the portions of the firm owned by managers, noninstitutional outside blockholders, and the firm's employee stock ownership plan increase. Changes in performance are positively associated with changes in ownership by managers and by noninstitutional outside blockholders but negatively associated with changes in ownership by employee stock ownership plans.

Keywords: Corporate control, regulation, ownership structure, anti-takeover provisions

Full paper (219 KB PDF) | Full paper (419 KB Postscript)

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Last update: July 16, 1997