References of "Leruth, Luc"
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See detailPower indices and the measurement of control in corporate structures
Crama, Yves ULg; Leruth, Luc ULg

in International Game Theory Review (2013), 15

This paper proposes a brief review of the use of power indices in the corporate governance literature. Without losing sight of the field of application, it places the emphasis on the game-theoretic ... [more ▼]

This paper proposes a brief review of the use of power indices in the corporate governance literature. Without losing sight of the field of application, it places the emphasis on the game-theoretic aspects of this research and on the issues that arise in this framework. [less ▲]

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See detailControl and Voting Power in Complex Shareholding Networks
Crama, Yves ULg; Leruth, Luc ULg; Su Wang

Conference (2011, June)

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See detailA Markov chain model of power indices in corporate structures
Crama, Yves ULg; Leruth, Luc ULg; Wang, Su

E-print/Working paper (2009)

This paper proposes to use a game-theoretic framework in analyzing complex corporate networks, notably in measuring the ``amount of control'' of both direct and indirect shareholders. The values of the ... [more ▼]

This paper proposes to use a game-theoretic framework in analyzing complex corporate networks, notably in measuring the ``amount of control'' of both direct and indirect shareholders. The values of the indices are defined by complex voting games, composed by interlocked weighted majority games. This paper proposes a characterization of corporate networks in which the notion of ``control'' can be well defined, as well as an algorithm that consistently estimates the power indices when it is the case. [less ▲]

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See detailControl and voting power in corporate networks: Concepts and computational aspects
Crama, Yves ULg; Leruth, Luc ULg

in European Journal of Operational Research (2007), 178(3), 879-893

This paper proposes to rely on power indices to measure the amount of control held by individual shareholders in corporate networks. The value of the indices is determined by a complex voting game viewed ... [more ▼]

This paper proposes to rely on power indices to measure the amount of control held by individual shareholders in corporate networks. The value of the indices is determined by a complex voting game viewed as the composition of interlocked weighted majority games; the compound game reflects the structure of shareholdings. The paper describes an integrated algorithmic approach which allows to deal efficiently with the complexity of computing power indices in shareholding networks, irrespective of their size or structure. In particular, the approach explicitly accounts for the presence of float and of cyclic shareholding relationships. It has been successfully applied to the analysis of real-world financial networks. (c) 2006 Elsevier B.V. All rights reserved. [less ▲]

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See detailA Principal-Agent Theory Approach to Public Expenditure Management Systems in Developing Countries
Leruth, Luc ULg; Paul, Elisabeth ULg

in OECD Journal on Budgeting (2007), 7(3),

A well-functioning public expenditure management system (PEM) is considered a critical pillar of government efficiency. This article discusses PEM systems in developing countries using an analytical ... [more ▼]

A well-functioning public expenditure management system (PEM) is considered a critical pillar of government efficiency. This article discusses PEM systems in developing countries using an analytical framework based on principal-agent theory. This simple model can be applied to various PEM systems and allows for comparisons between institutional settings. To illustrate this, the authors analyse the benefits derived from the use by the ministry of finance of ex post audits and ex ante controls, and assess their value in terms of their ability to deter cheating. The authors derive a set of possible “control regimes” which can be used by the ministry of finance. [less ▲]

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See detailA Principal-Agent Theory Approach to Public Expenditure Management Systems in Developing Countries
Leruth, Luc ULg; Paul, Elisabeth ULg

in IMF Working Paper (2006), 06/204

A well-functioning public expenditure management (PEM) system is considered a critical pillar of government efficiency, on par with a low-distortion tax system and efficient tax administration. The paper ... [more ▼]

A well-functioning public expenditure management (PEM) system is considered a critical pillar of government efficiency, on par with a low-distortion tax system and efficient tax administration. The paper discusses PEM systems in developing countries using an analytical framework based on principal-agent theory. This simple model can be applied to various PEM systems, and allows for comparisons between institutional settings. To illustrate this, we analyze the benefits derived from the use by the Ministry of Finance (MoF) of two control instruments; ex post audits and ex ante controls, and assess their value in terms of their ability to deter cheating. We derive a set of possible “control regimes” which can be used by the MoF. Although we illustrate the use of the model using developing countries, it is also relevant to developed economies. [less ▲]

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See detailCorporate control concentration measurement and firm performance
Crama, Yves ULg; Leruth, Luc ULg; Renneboog, Luc et al

in Batten, J.A.; Fetherston, T.A. (Eds.) Social Responsibility: Corporate Governance Issues (2003)

Traditionally share price returns and their variance have been explained by factors linked to the operations of the company such as systematic risk, corporate size and P/E ratios or by factors related to ... [more ▼]

Traditionally share price returns and their variance have been explained by factors linked to the operations of the company such as systematic risk, corporate size and P/E ratios or by factors related to the influence of the macro-economic environment. In these models, the institutional environment in terms of concentration and nature of voting rights, bank debt dependence and corporate and legal mechanisms to change control have rarely been included. In this paper we have a dual objective. We first highlight the large discrepancies among corporate governance environments. We conclude that there is a need for a theoretically well-grounded measure of corporate control applicable to all systems and we define such a measure. Secondly, the impact of ownership structure on the share price performance and corporate risk is empirically analysed for companies listed on the London Stock Exchange. Within Europe, the UK corporate landscape is particularly interesting because of its widely-held nature and the liquidity of the market for controlling rights. Our results point to the fact that voting power, as measured by Z-indices, is tightly correlated to both share price performance and risk. The negative relation between the largest Z-index and corporate share price performance is explained by the fact that the voting power held by executive directors measures the degree of insider entrenchment which has a negative impact on performance. This negative relation is compensated when outside shareholders (e.g. industrial companies, individuals or families) own substantial voting power and may actively monitor the firm. This is because with a counterbalancing pole of control, the largest shareholder is forced to compromise and maximize firm’s profits rather than his or her own utility function. The risk regressions show that entrenched insider as well as large shareholders my seek higher levels of systematic risk. It may be that these shareholders prefer risky high growth strategies which are providing higher levels of private benefits for these types of shareholders at the expense of small shareholders. We also conclude that the classic Herfindahl indices inaccurately measure control, which is reflected in the weaker relationship with performance. [less ▲]

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