Øyvind Bøhren

Energy Economics 69 p. 442-455 Doi: https://doi.org/10.1016/j.eneco.2017.12.010

We show how a recent drop in the Norwegian capital uplift rate by two percentage points changes optimal field design and reduces field value for shareholders. Although optimal design changes considerably and value drops by 12%, the ability to reoptimize design after the shock is worth only 1.5% of field value. This evidence suggests that large behavioral effects of a shock do not necessarily imply large value effects, making it less important to always account for the taxpayers' response. The valuation error in such cases may be moderate if one instead uses the simplifying and widespread assumption of unresponsive taxpayers.

European Financial Management 22(1) p. 3-30 Doi: https://doi.org/10.1111/eufm.12060

Samfunnsøkonomen p. 14-23

Nordisk Tidsskrift for Selskabsret p. 1-14

Journal of Corporate Finance 28 p. 152-168 Doi: https://doi.org/10.1016/j.jcorpfin.2013.12.005

Norway is the first, and so far the only, country to mandate a minimum fraction of female and male directors on corporate boards. We find that after a new gender balance law surprisingly stipulated that the firm must be liquidated unless at least 40% of its directors are of each gender, half the firms exit to an organizational form not exposed to the law. This response suggests that forced gender balance is costly. The costs are also firm-specific, because exit is more common when the firm is non-listed, successful, small, young, has powerful owners, no dominating family owner, and few female directors. These characteristics reflect high costs of involuntary board restructuring and low costs of abandoning the exposed organizational form. Correspondingly, certain unexposed firms hesitate to become exposed. Overall, we find that mandatory gender balance may produce firms with inefficient organizational forms or inefficient boards.

Journal of Banking & Finance 37(11) p. 4073-4086 Doi: https://doi.org/10.1016/j.jbankfin.2013.07.021

This paper explores whether ownership matters in a fundamental sense by comparing the performance of stockholder-owned firms with the much less analyzed nonprofit firms. No stakeholder has residual cash flow rights in nonprofit firms, and the control rights are held by customers, employees, and community citizens. Accounting for differences in size and risk and comparing only firms in the same industry, we find that stockholder-owned firms do not outperform nonprofit firms. This result is consistent with the notin that the monitoring function of stockholders may be successfully replaced by other mechanisms. We find evidence that product market competition may play this role as a substitute monitoring mechanism.

International Review of Law and Economics 36(1) p. 48-58 Doi: https://doi.org/10.1016/j.irle.2013.04.007

We analyze minority freezeout offers in a legal environment where minority stockholders can reject the offer and ask the court to value their nontendered stock. This regulatory setting allows us to observe the disciplining effect of legal enforcement on stockholder behavior. We find that minority stockholders reject about one out of ten freezeout offers, and that rejection is more likely when the bidder has controlled the firm for quite some time before the offer. Rejected offers take on average around three years to be settled in court, and litigation costs are almost never paid by minority stockholders. The court mostly prices rejected offers above the offer price, particularly when the firm is private, when the bidder has controlled the firm for an extensive period before the offer, and when the case is large. These findings suggest that minority stockholders consider most freezeout offers commensurate with the level of legal stockholder protection as enforced by the courts. The majority stockholder tends to underestimate the legal protection of minority rights in settings where these rights are particularly vulnerable to exploitation. Nevertheless, minority stockholders who take their case to court often face years of waiting, and for a highly unpredictable litigation return.

Praktisk Økonomi & Finans 29(3) p. 57-75

Journal of Banking & Finance 36(10) p. 2852-2864 Doi: https://doi.org/10.1016/j.jbankfin.2012.06.007

This paper compares the dividend policy of owner-controlled firms with that of firms where the owners are a minority relative to non-owner employees, customers, and community citizens. We find that regardless of whether owners or non-owners control the firm, the strong stakeholder uses the dividend payout decision to mitigate rather than to intensify the conflict of interest with the weak stakeholder. Hence, the higher the potential agency cost as reflected in the firm’s stakeholder structure, the more the actual agency cost is reduced by the strong stakeholder’s dividend payout decision. These findings are consistent with a dividend policy in which opportunistic power abuse in stakeholder conflicts is discouraged by costly consequences for the abuser at a later stage. Indirect evidence supports this interpretation.

Magma forskning og viten 15(3) p. 63-72

Denne artikkelen bruker et konkret pedagogisk prosjekt i finans til å vise hvordan ønsket om undervisning med relevans og mangfold kan avleire seg i et læreverk. Vår nøkkel er å utvikle bok og nettside i tidsmessig parallell snarere enn i sekvens, ha klar arbeidsdeling og sømløs overgang mellom de to komponentene, og å gjøre nettsiden spesielt bred og dyp. I artikkelen konsentrerer vi oss om nettsiden og beskriver hvordan hensynet til relevans og mangfold ivaretas gjennom aktiv bruk av medieoppslag, skreddersydde regneark, integrert stikkordliste, spillbaserte øvingsoppgaver, kalkulator- og regnearkhjelp, lydfiler for MP3-spiller og tilbud om forelesermateriale. Vår erfaring tyder på at integrerte læreverk er krevende å utvikle og på kort sikt ulønnsomme for både forfatter og forlag. I et lengre perspektiv tror vi teknologidrevet konkurransepress vil favorisere dem som utnytter at teknologi med høyt pedagogisk potensial nå er lett tilgjengelig for forfatter, forlag, foreleser og student. Uansett står produsenter og brukere av læremidler overfor store utfordringer.

Prosa - tidsskrift for skribenter 17(3) p. 63-72

Journal of Business Finance & Accounting 37(9-10) p. 1281-1308 Doi: https://doi.org/10.1111/j.1468-5957.2010.02222.x

This paper analyzes the economic rationale for board regulation in place and for introducing new regulation in the future. We relate the value of the firm to the use of employee directors, board independence, directors with multiple seats, and to gender diversity. Our evidence shows that the firm creates more value for its owners when the board has no employee directors, when its directors have strong links to other boards, and when gender diversity is low. We find no relationship between firm performance and board independence. These characteristics of value-creating boards support neither popular opinion nor the current politics of corporate governance.

Praktisk Økonomi & Finans 8(2) p. 65-75

Praktisk Økonomi & Finans p. 65-75

Journal of Business Finance & Accounting 33(5-6) p. 671-695 Doi: https://doi.org/10.1111/j.1468-5957.2006.00592.x

We explore to what extent firms deliberately manage their financial reports by exploiting the flexibility of generally accepted accounting principles. Using a sample of Oslo Stock Exchange-listed firms with 20–50% equity holdings in other firms, we find that firms with high financial leverage tend to maximize reported earnings from these investments through their choice between the cost method and the equity method, possibly in an attempt to reduce debt renegotiation costs or to avoid regulatory attention. In contrast, managers do not systematically bias reported earnings to extract private benefits or to signal revised expectations about future cash flows. Firms use different earnings management tools in a consistent way, as the earnings effect of the cost/equity choice is not offset by discretionary accruals.

International Corporate Governance after Sarbanes-Oxley, Paul Ali and Greg Gregoriou (ed) p. 27-64

Økonomisk forum 59(5) p. 4-14

Tidsskrift for Rettsvitenskap 118(1-2) p. 122-152

International Journal of Accounting 39(1) p. 1-19 Doi: https://doi.org/10.1016/j.intacc.2003.12.001

We examine to what extent firms adhere to the stated intent of noncompulsory accounting standards when reporting for intercorporate investments. The Generally Accepted Accounting Principles (GAAP) in Norway strongly recommend that a 20–50% intercorporate investment is accounted for by the equity method rather than the cost method, if the investment is long-term, of strategic importance, and involves significant influence. Even so, we find that the actual use of the equity method is independent of the duration of the investment period, the fraction of equity held, its recent growth, and the investor's voting power. This lack of compliance suggests that one cannot use the observed choice between the cost method and the equity method to infer the underlying characteristics of the investment as specified by the accounting standard. Flexible GAAP may therefore not induce firms to disclose the information that the GAAP were designed to produce.

PricewaterhouseCoopers (ed): Corporate Governance i et norsk perspektiv p. 124-137

Praktisk Økonomi & Finans 20 p. 3-17

Næringspolitikk for en ny økonomi p. 91-110

Essays on Uncertainty - Festskrift til Steinar Ekerns 60-årsdag p. 157-176

Nordic Journal of Political Economy (NOPEC) 27 p. 55-86

Journal of Business Ethics 17 p. 745-755

European Finance Review 1 p. 265-287

Skarvet Forlag

Applied Financial Economics 7 p. 307-310

Journal of Financial Economics 46 p. 223-261

Praktisk økonomi og ledelse 12(2) p. 51-60

Praktisk økonomi og ledelse 12(4) p. 47-57

Journal of Banking & Finance 18 p. 687-704

Sosialøkonomen 47(2) p. 20-24

Beta – Scandinavian Journal of Business Research 5(1) p. 54-63

Norsk Økonomisk Tidsskrift 104(4) p. 303-336

Sosialøkonomen 44(11) p. 13-15

Journal of Economic Psychology 11(1) p. 1-34

Beta – Scandinavian Journal of Business Research 1(1) p. 23-30

Beta – Scandinavian Journal of Business Research 1(2) p. 1-2

Sosialøkonomen 40(9) p. 19-23

Beta – Scandinavian Journal of Business Research 1(4) p. 101-106

Journal of Business Finance & Accounting 11(2) p. 199-211

Bedriftsøkonomen 45(10) p. 532-537

Sosialøkonomen 37(9) p. 12-16

Journal of Business Finance & Accounting 10(1) p. 139-146

Bedriftsøkonomen 44 p. 355-360

Bedriftsøkonomen 44(2) p. 128-135

Bedriftsøkonomen 44 p. 355-360

Bedriftsøkonomen 43(9) p. 480-485

Economics Letters 8(4) p. 1-6

Energy Economics 2 p. 145-153

Erhvervsøkonomisk Tidsskrift 44(1) p. 31-48

The Scandinavian Journal of Economics 82(1) p. 45-58 Doi: https://doi.org/10.2307/3439551

Decision Sciences 10(4) p. 519-526

Sosialøkonomen 33 p. 18-20

Bedriftsøkonomen 40(10) p. 494-495

Sosialøkonomen 32 p. 28-39

Norsk Økonomisk Tidsskrift 13(3) p. 1-16

BI Finance Brown Bag Seminar

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Handelshøyskolen BI

This paper examines how dividend policy influences conflicts of interest between majority and minority stockholders in a large sample of private firms with controlling blockholders. We find that a higher potential for stockholder conflicts is associated with higher payout. This tendency is stronger when the minority stockholder structure is diffuse and when the minority is not on the firm’s board. Minority-friendly payout is also associated with higher subsequent minority investment in the firm. These findings are consistent with the notion that dividend policy is used to mitigate agency costs, particularly when this benefits the majority in the longer run.

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SEVENTH NORWEGIAN-GERMAN SEMINAR ON PUBLIC ECONOMICS

Konferanse, Norges Rederiforbund

Norwegian-German Seminar on Public Economics

Kurs, Juristenes Landsforening

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BI Norwegian Business School

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37th Annual Meeting of the European Finance Association

Handelshøyskolen BI

Handelshøyskolen BI

Handelshøyskolen BI

Fagbokforlaget

BI Norwegian Business School

Handelshøyskolen BI

We analyze a wide range of corporate finance and governance characteristics in all active Norwegian firms with limited liability over the period 1994-2005. This sample includes about 77,000 nonlisted (private) firms and 135 listed (public) firms per year. Nonlisted firms have barely been addressed in the finance literature, despite our finding that they employ four times more people than listed firms, have about four times higher revenues, hold twice as much assets, and constitute over 99% of the enterprises. Indirect evidence suggests that this is also the typical situation worldwide. The unexplored nature of nonlisted firms makes us address a large set of characteristics, and to focus more on describing overall patterns in the data rather than making elaborate tests of behavioral hypotheses. We find that the size distribution of firms in the economy is close to lognormal, which is consistent with independence between size and growth for the individual firm.

34th Annual EFA Meeting

This paper explores how board composition influences the conflict of interest between principals and agents, the production of information for monitoring and advice, and the board's effectiveness as a decision-maker. Paying particular attention to the board's independence, information production, and diversity, we exploit unusually rich data from an unexplored institutional environment to estimate models that account for potential endogeneity. We find that performance improves when the directors own equity in the firm, have wide information networks to other firms, and when the board has low gender diversity, no employee directors, and small size. No systematic association is found between performance and independence. We find that board mechanisms are endogenous, both relative to each other and to performance. These characteristics of value-creating boards are consistent with theoretical predictions and the limited existing evidence, but lend no support to popular opinion and the current politics of corporate governance.

Handelshøyskolen BI

The distribution of formal control rights among the firm’s stakeholders (such as stockholders, creditors, employees, politicians, and customers) attracts considerable public attention in many countries. For instance, a common view in the UK and the US is that firms should have profit maximization as their only objective, and that stockholders should be the dominant stakeholder in corporate governance. In contrast, conventional wisdom in Continental Europe and Japan is that firms should have multiple objectives and allocate formal power to more stakeholder types than just stockholders. The politics of corporate governance addresses this issue by regulating the owners’ ability to control the corporation. This report addresses this issue empirically by trying to answer two questions. First, what relationship do we actually observe between stakeholder structure and corporate behavior? For instance, do firms take less risk when stockholders share control rights with employees, customers, and politicians? Second, what is the real-world link between stakeholder structure and economic performance? For instance, do ownerless firms have lower returns to capital invested than firms owned by stockholders?

Handelshøyskolen BI

To date little is known about how long equity ownership lasts, what determines its length, and whether ownership duration is related to rm performance. Using a unique time series of equity holdings over eleven years, we nd that on average the rm's largest owner stays less than three years and stays longer than owners with smaller stakes. The duration of nancial institutions and foreigners is shorter than that of individuals and industrial rms. We show that ownership duration is duration dependent as the probability of closing an equity position is a function of how long the owner has held the stake. Ownership duration appears to match the duration of the rm's investment projects. We nd no evidence that large owners vote by foot in the sense that bad news about earnings leads to duration ending. There is a negative relationship between ownership duration and a rm's performance in general, but the sign and strength of this relationship di ers across owner types. Long duration by nancial institutions and industrial corporations is negatively related to performance, whereas the opposite is true for individuals. This suggests that long term ownership may improve rm performance if the monitoring is direct as opposed to delegated.

Workshop on the Politics of Corporate Governance

This paper explores how board composition influences the conflict of interest between principals and agents, the production of information for monitoring and advice, and the board's effectiveness as a decision-maker. Paying particular attention to the board's independence, information production, and diversity, we exploit unusually rich data from an unexplored institutional environment to estimate models that account for potential endogeneity. We find that performance improves when the directors own equity in the firm, have wide information networks to other firms, and when the board has low gender diversity, no employee directors, and small size. No systematic association is found between performance and independence. We find that board mechanisms are endogenous, both relative to each other and to performance. These characteristics of value-creating boards are consistent with theoretical predictions and the limited existing evidence, but lend no support to popular opinion and the current politics of corporate governance.

Praktisk Økonomi & Finans p. 91-103

BI Norwegian Business School

This paper explores empirically how board composition influences the conflict of interest between agents and principals, the production of information for monitoring and support, and the board's effectiveness as a decision-maker. We find that potential agency costs in our sample firms are high because the ownership-driven monitoring incentives are low. The average board has only six members, gender diversity is low, roughly half the firms have employee directors, and most CEOs are neither directors in their firm nor elsewhere. Using a wide set of such board characteristics and new measures of board independence and director networking, static and dynamic fixed effects panel data models show that value-creating boards are aligned with their shareholders, but dependent on the CEO. Multiple directorships create valuable information networks, whereas diversity in terms of gender, board size, and employee directors reduces value. Models accounting for endogeneity and reverse causation support these conclusions.

Handelshøyskolen BI

Skarvet Forlag

Handelshøyskolen BI

Skarvet Forlag AS

BI Norwegian Business School

Skarvet

BI Norwegian Business School

Skarvet

Praktisk økonomi og ledelse 7(3) p. 115-122

NKS

Skarvet

BI-forum p. 10-15

BI-forum p. 9-11

Universitetsforlaget

Beta – Scandinavian Journal of Business Research 1(1) p. 50-51

Norges Handelshøyskole

Norges Handelshøyskole

Foretaksstrategi

Norges Handelshøyskole

Universitetsforlaget

Noroil p. 31-35

Økonomisk Revy 45(2) p. 457-469

Norges Handelshøyskole

Norges Handelshøyskole