Deregulation and the adaptation of governance structure: the case of the US airline industry

• 成果类型: Article
• 署名作者: Kole, SR; Lehn, KM
• 署名单位: University of Rochester; Pennsylvania Commonwealth System of Higher Education (PCSHE); University of Pittsburgh
• 刊物名称: JOURNAL OF FINANCIAL ECONOMICS
• ISSN/ISSBN: 0304-405X
• DOI: 10.1016/S0304-405X(99)00005-7
• 发表日期: 1999
• 页码: 79-117
• 关键词: CORPORATE GOVERNANCE; regulation; airlines

摘要

Deregulation provides a natural experiment for examining how governance adapts to structural changes in the business environment. We investigate the evolution of governance structure, characterized by ownership concentration, compensation policy, and board composition, in the U.S. airline industry during a 22-year period surrounding the Airline Deregulation Act of 1978. Consistent with theory, we find that after deregulation (i) equity ownership is more concentrated, (ii) CEO pay increases, (iii) stock option grants to CEOs increase, and (iv) board size decreases. Airlines' governance structures gravitate toward the system of governance mechanisms used by unregulated firms. The adaptation process is gradual, however, suggesting that it is costly to alter organizational capital. We also present evidence on the relation between governance structure and firm survival. (C) 1999 Elsevier Science S.A. All rights reserved. JEL classification: G32; G38; J33; L93.