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Does efficient internal investment generally translate into successful external investment activities? In this research we use the internal capital allocation efficiency as a proxy for the efficiency of internal investment, and study whether firms that are internally efficient also make efficient external investment decisions. Our sample consists of multi-segment acquirers that announce acquisitions between 1986 and 2003 (only completed deals are included). We estimate short-term and long-term abnormal performance, excess value and operating performance around mergers in order to measure the success of acquisitions (external investment decisions). Our results indicate that internal capital allocation efficiency is indeed a significant factor in the success of acquisition. Firms that are internally efficient also make efficient external investment decisions. Conversely, internally inefficient firms are also externally inefficient. Thus, our results indicate that internal efficiency can be used as a predictor of the success and efficiency of external investment decisions.

We derive empirical predictions from the standard investment-cash flow framework on the functioning of internal capital markets (ICM), but circumvent its criticism by focusing on parent cash flow and investment opportunities. We test these predictions using a unique data set of parent firms and their listed and unlisted subsidiaries in 90 countries over the period 1995-2006. We find that company and country institutional structures matter. (1) Ownership participation of the parent firm in the subsidiary plays a crucial role for the proper functioning of ICMs. The larger the ownership stake of the parent, the better the functioning of the ICM. (2) The best functioning cross-border ICMs can be found in the sub-sample of firms with parents from a country with "strong" institutions and subsidiaries from a country with "weak" institutions. (3) Unlisted subsidiaries are much more dependent on the ICMs their parents provide than listed subsidiaries. Thus, ICMs are not per se "bright" or "dark", their proper functioning depends on how they are set up. (authors' abstract)

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<p>Organizational Capital Budgeting Model (OCBM) is a general theory of capital budgeting that incorporates traditional capital budgeting theories and the consideration about firm's information/ organization structure. The traditional financial capital budgeting model is a special case of OCBM. Therefore, OCBM not only broadens the traditional model, but also explains the heterogeneous behaviors of firms using quasi/non-financial version of capital budgeting. I demonstrate the validity of OCBM with multiple research methods. The field studies about Asian conglomerates are carefully constructed. The conglomerates are important dataset to study organizational decision making because of their size, scope, controversial behaviors and global presence.</p> / Dissertation

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La variété des situations auxquelles sont confrontés les acteurs de la vie des affaires, et l’importance des sommes en jeu, constituent un aiguillon particulièrement stimulant pour la réflexion des spécialistes dans le domaine financier et juridique. Un engouement s’enracine également dans la tendance des marchés financiers à exiger une plus grande transparence dans la gestion des groupes diversifiés, dont la lisibilité financière est souvent réduite. Une telle exigence de lisibilité est au cœur de la définition des actions traçantes. Apparues outre-Atlantique au début des années 80, elles ont bénéficié, avec l’avènement de la nouvelle économie, d’un regain d’intérêt notable et d’un volume d’émission élevé sur le marché financier américain depuis les années 90. L’émission d’actions traçantes, mis à part leur nature hybride, constitue une mesure de restructuration assez particulière qui vient compléter la base d’études déjà constituée sur le thème de la restructuration de capitaux. Cette recherche a pour ambition de montrer comment introduire les actions traçantes sur le marché financier français et plus particulièrement, elle permettra d’élargir le choix des formes de restructuration qui seront présentés pour des entreprises souhaitant chercher de nouvelles sources de financement, se procurer de nouveaux moyens d’acquisition et atteindre l’objectif fondamental qui est celui de la création de valeur. De ce fait, l’émission d’actions traçantes se trouvera en concurrence avec d’autres formes de restructuration (scission et apport partiel d’actif). Par conséquent, on présentera les facteurs dont les entreprises devront tenir compte dans le choix des restructurations envisagées. / The variety of situations faced by actors of the business concerning their field, and the importance of the amount of money involved, is considered as a mind moving element particularly for specialists in financial and legal matters. Enthusiasm is also rooted in the financial markets which tend to require greater transparency from groups, including financial visibility that is often reduced. Such a requirement is highly recommended in the definition of tracking stock. Emerged across the Atlantic in the early 80s, they have benefited, with the advent of the new economy, a noticeable income of interest and have increased since the early '90s until now through a large number of issuances on the U.S. financial market. The issuance of tracking stock, apart from its hybrid nature, contains a certain measure of restructuring rather special that completes the basis of studies already made on the subject of capital restructuring. This research also aims to show how to introduce tracking stock on the French financial market, and more particularly to expand the choice of forms of restructuring that will be presented to companies in hope to seek new funding sources, to obtain new ways of acquisition and achieve a fundamental objective which is the creation of value. Therefore, the issuing of tracking stock will have to compete with other forms of restructuring (spin-off, equity carve-out). Thus, we present the factors that companies should deem when choosing the restructuring proposed.

本研究主要探討股權重組活動對公司治理的影響，以及股權重組與公司治理程度是否會影響經營績效。多角化原為企業增強經濟效率、發揮綜效的策略，但近年來發現，企業多角化有折價的現象。又諸多折價現象中，發現企業產生了內部價值衝突的狀況。推敲折價現象的發生，可能與管理者能力有關，當組織越廣大而多層下，管理能力不堪負荷企業的經營效率將因為業務種類越廣而降低。 從臺灣的個案訪談中，了解到小股東對分割宣告的態度多為保守而疑慮的，未若歐美文獻所探討的對股東財富具有正面的激勵。因此，本研究探討股權重組所欲達成的目的是否對公司治理有正面的幫助，並進一步以子公司的上市為基準點，討論上市前管理能力、公司治理與股權重組目的之前是否具備關聯性，並研究上市後股權重組目的、公司治理與經營績效之前是否具備關聯性。 主要貢獻如下: 1. 股權重組是企業從多角化走向分權、業務單純化的程序，股權重組有 利於讓外部投資人減少資訊不對稱的困境，在分別評價不同性質企業下，有助於回復多角化折價所失去的價值。 2. 管理能力隨著企業的發展，會提高或降低。管理者表現不佳未必要以撤換管理者為唯一手段，且要提高管理者努力程度也不盡然是以設計良好的獎酬制度，原因可能是內部資源配置不佳，而股權重組是協助企業改善內部資本市場缺乏效率性的重要手段。 3. 股權重組是讓單一實體企業創建兩個獨立的企業個體，他會引進新得股東、外部專家與讓管理者更可直接接受外部市場評價，股權重組是否可讓企業更進一步地改善公司治理結構或減少盈餘管理現象，仍有賴企業分割的真實目的。在臺灣，資產分割對股東財富的影響為負效果，有別於歐美資本市場；權益分割雖為正的財富效果，但反應也不如歐美市場的表現。 4. 管理能力與公司治理表現會影響股權重組的推動，股權重組的目的與公司治理的表現會影響經營績效。 / 1.Ownership Restructuring Relationships Equity Carveouts and Spin-offs were called “Ownership Restructuring Relationships”. Equity Carveouts are usually followed by spin-offs. Spin-offs are more often associated with controlled subsidiaries. In a spin-off, a company distributes on a pro rata basis all the shares it owns in a subsidiary to its own shareholders. Two separate public corporations with the same proportional equity ownership now exist where only one existed before. Equity Carveouts means “ A company sells up to 20% of the stock of a segment to raise funds followed by a tax-free spin-off. Spin-offs are distinguished from equity carveouts, in which some of a subsidiariy’s shares are offered for sale to the general public, bringing an infusion of cash to the parent firm without loss of control. In any cases, management may seek to split the company into small pieces through a series of restructuring techniques. Including initial equity carveouts and subsequent spin-offs. 2.Wants Taiwan listed Companies have incurred on conflict between subsidiaries in recent years. They usually take the step of Restructuring ownership relationship to approach their strategy, we exploring the cause and consequence among financial strategy, corporate governance and performance. The purpose of this paper is to explore the decision whether can impact on ability of manager or not. First, to develop a new path is main contribution in Corporate Governance. Second, to enhance the diversified field referred as Governance. Third, Which can increasing wealth of owner at the issue of spin-offs and carveouts in Taiwan. Fourth, After enacted the decision, What effect are their needs and the relationship between strategy and performance? 3.Literature Review (1)Restructure Several studies have examined the market reaction to the announcement of carve-outs (Schipper and Smith, 1986) and spin-offs (Hite and Owers,1983;Miles and Rosenfeld,1983; and Schipper and Smith,1983) These studies demonstrate that the announcement of a corporate spin-off or carve-out is associated with positive stock price movements in the parents’ stock. The continuity of ownership in a spin-off implies that any subsequent changes in value from the reorganization accure to the existing shareholders of the parent corporation. Galai and Masulis claim spin-offs may erode the position of the bondholders causing a wealth transfer from bondholders to stock holders while leaving the value of the firm unchanged. Schipper and Smith also contend that the creation of publicly-traded firms results in new information sources which enable shareholders to more closely monitor the activities of managers, thereby reducing agency costs and enhancing shareholder wealth. The asset focus explanation has viewed spin-offs as improving the focus of a firm, thus serving to remedy the loss of focus inherent in a diversified conglomerate. (2)Restructure and owners wealth A significant positive stock price reaction was surrounding spin-off announcements. The source of the gains in spin-offs, however, is difficult to identify and validate. Authors have argued that spin-offs:  Mitigate an unwieldy organizational structure by increasing focus.  Enhance contracting efficiency  Reduce regulatory or tax constraints  Reduce information asymmetries regarding the operatons of parent firms  Are possible corrections of acquisition mistake.  Improve managers’ incentives to maximize shareholder wealth in spun-off firms. Allen et al(1995)also document an inverse relation between the gains to spin-offs and losses associated with prior takeovers of those units by the parent firm. Krishnaswami and Subramaniam(1999) find that information symmetries in parent firms are positively related to the excess stock returns around spin-off announcements. While Daley, Methrotra, and Sivakumar(1997)report that focus-increasing spin-offs earn higher announcement-period excess stock returns relative to spin-offs that do not increase focus. Cusatis, Miles, and Woolridge(1993)find that the market for corporate control has historically played a major role in the wealth gains to shareholders of firms involved in spin-offs. The sources of the increasing in shareholder wealth which accompanying the announcement of a corporate spin-off. However, are not apparent. Hite and Owers(1983) and Schipper ;and Smith(1983) document that shareholder gains are related to neither wealth transfer from other financial claimants nor to the beneficial resolution of inefficient legal to regulatory contractual relationships. (3) Information Asymmetry and Restructuring Practitioners and the popular press usually propose an information-related motivation for spin-offs. CEO of most firms involved in spin-offs claim that the spin-off improves the firm’s market value because investors are able to perceive value more clearly after the spin-off. As information asymmetry hypothesis that a spin-offs increasing value. because it mitigates the information asymmetry in the market about the profitability and operating efficiency of the different divisions of the firm. Several studies have empirically analyzed the source of shareholder gains around spin-offs. We may be classified as follow: (i) transfer of wealth from bondholders to shareholders. (ii) tax and regulatory advantages, (iii)restructuring of incentive contracts synergies hypothesis has received broad empirical support. As spin-offs transform a shingle firm into many firms that have separate stock market listings, they increase the number of traded securities and make the price system more imformative. (4) Internal Capital Market The relative efficiency of internal and external capital market transactions is a critical element in defining the boundaries of the firm. Mackie-Mason(1990) says that internal capital markets are an empirically important mechanism by which capital is allocated across and within lines of business. Alchian(1969) and Williamson(1970) argue that internal capital markets are more efficient than external markets because corporate headquarters is likely to be better informed than external suppliers of capital about investment opportunities. Meyer, Milgrom and Roberts (1992), Wulf(1997), Rajan et al(2000) and Scharfstein and Stein(2000) argue that rent seeking by division al managers can distort the functioning of internal capital markets, inducing corporate headquarters to allocate excessive capital to divisions with poor investment opportunities where rent-seeking incentives are strongest. Shin and Stulz(1998) evidence that when capital is reallocated across divisions, it does not seem to go in any systematic way to the divisions with the better investment opportunities. (5) Governance and Restructuring While a well-functioning system of corporate governance and control should contribute to the development of competitive advantage, internal control practices may not always operate effectively. The restructuring of the U.S. economy that followed this century’s fourth merger wave can be seen as inefficiencies associated with firms’ pursuit of financial self-sufficiently and conglomerate diversification. Having said this, the work on internal control is limited in two ways. First, there have been few studies that consider director attributes, as well as the identity and compensation of CEOs simultaneously. Most work considers each as a topic worthy of its own investigation. Of course, these CEO and director attributes all comprise interrelated aspects of internal corporate control. And second, While Walsh and Seward (1990) acknowledged that a voluntary corporate restructuring could be seen as an attribute of internal control. Relatively little empirical work has been done on the topic within a governance and control framework. Our goal is to examine the relationship between a voluntary corporate restructuring and the more traditional internal corporate control mechanisms identifies by Walsh and Seward (1990). 4. Research Design (1)Hypothesis H1: The Goal of Restructuring Ownership Relationship is positive related with enhancing Degree of Corporate Governance; also is positive related with reduce Earning Management. H1-1: A predictable variable is reducing diversification which has positive related with the share-hold-ratio increasing in institutional investor. H1-2: The more forecast error from analysts, the less do add-up share hold-ratio from institutional investor; also the more is earning management from managers. H1-3: Earning quality increasing is positive related with institutional investor add-up their holds; also is positive related with manager decreasing their earning management. H1-4: Capital Expenditure decreasing is positive related with institutional investor add-up their holds; also is positive related with manager decreasing their earning management. H2: Restructuring Ownership Relationship can enforce the structure of subsidiaries’ governance, also loft the ability of top management. H2-1: If Insider Trading Index is lower at the subsidiaries after restructuring, the relationship with reducing agency cost is positive. H2-2: Board is positive related with reducing the agency cost. H2-3: The more influence power index is, the less agency costs are at subsidiaries’ restructuring. H3: Announcement is positive related with wealth effect. H3-1: announcement has positive abnormal return during event window. H3-2: Spin-off has negative accumulate abnormal return during announcement. Carveout have positive accumulate abnormal return during announcement. H3-3: the long-term in wealth effect which after restructure is superior to before restructure. H4: Among governance, restructuring and performance have positive relationship. H5: the performance means after restructure is superior to before restructure. (2)Event study The original sample consisted of 101 firms parent companies had spun-off subsidiary common stock to their shareholders over the period 1990 to 2005, and either sample consisted of 79 firms parent companies had carved-out subsidiary common stock to outsiders. The mean adjusted return approached was used to compute abnormal returns. Recent evidence by Masulis(1994) as well as the more sophisticated market models in detecting abnormal performance when it is present. To determine the adjusted daily returns of a security, the average daily return over specified interval, the comparison period return(CPR), it taken as an estimate of the expected daily return for the period under study, the observaton period adjusted returns are then computed by subtracting the CPR from the daily return over the observation period. The CPR for the current study is based upon the average daily return from day –210 through day –21, the observation period extends from day –10 through day +10 using the following formula: a. Average standard abnormal return:ASR= 。 b. Accumulated standard abnormal return: CASR= 。 (3) Logistical regress model We will test the relationship between goal of restructuring and governance to use the method in logistical model. Because the binary variables can catch add or deduct from institutional investor. Institutional investor may be proxy variable of enforce structure of Corporate governance that is depended variable by us. In addition to proxy of governance, We select another depend variable which is transparency on finance to be a proxy variable of earning management in stead of agency cost. If hold-stock-ratio is adding means the structure is better in the wholly year. And if transparency-on-finance is deducting means the cost is saver in the wholly year. Through binary variable to test the relationship is worse than multi-regression model, we only want to know the meaning whether restructuring of owner relationship is function of corporate governance to find the effect on financial decision. Suppose that the strong relationship is existed between restructuring and governance, hence, we will explore relationships among governance, restructuring and performance in advance. (4) Simultaneous Equation model If ability can impact on financial decision and producing effect indirectly on governance, how do governance and performance can impact on financial decision? There are many papers to discuss the efficient of internal capital market where were related with governance and performance from inference. The evidence-paper is scarcity and also non-suitable on Taiwan. We Seemingly see the consequence is well between variables, their relationship may be interact to display on cause and consequence. 5. Conclusion (1) We get a strong evidence to support the goal can influence on governance. Institutional investors need the sign to adjust their stock and join the better governance. (2) To approve the refocusing hypothesis those improve the performance and manager’s ability. Their purpose of taking the corporate restructure is not only owner wealth but also to modulate the internal resource on conglomerate. (3) Spin-offs is difference from carve out on wealth effect from announcement period. But they also have the common effect is positive on announce day. Spin-offs have negative abnormal return prior to announcement and carve out have positive abnormal return through announce day. Our conclusion is different from west papers. (4) Ownership structure have influence on performance, Suppose that highly controlled parent company get more inflow than lower controlled parent company, in the meaning of controlling shareholder or block holders will influence on performance and ability of manager through corporate restructure.