**Preface XI**


Preface

traditional theories).

The economic world in which we currently live is dominated by the essential and indispen‐ sable presence of companies. The responsible management of these companies results in their good performance and this promotes welfare of our societies. Since 1937, when Ronald Coase published his seminal work on the nature of the firm, not a few have been the further theoretical and empirical developments that have sought to explain how to optimize the firm value.. These theoretical approaches have evolved from the classical, pragmatic micro‐ economics and the traditional industrial economy—more oriented toward the theory of markets and how resources are allocated to optimize results—to more integrated and holis‐ tic approaches such as behavioral economics, agency theory and the theory of the economics of transaction costs (which take the risk of removing some of the static assumptions of more

Such adjustments in the theory of the firm lead to incorporate more dynamic elements like the existence of information asymmetrically distributed among the interested parties, the opportunistic behavior among parties and their different motivations, and the existence of hidden costs in the formalization of contracts, among many other market imperfections.

All these theoretical bodies do not pursue but a question of substance: explain how the value of the firm is determined. Such a question is supported by the most important assumption in modern corporate finance: the maximization of the shareholders' wealth is the goal of the firm, which in other words is reflected in the maximization of the firm value. Consequently, brand new questions arise as a result. What variables determine the firm value? Are these determinants controllable or uncontrollable by the managers of the companies? Is the impact of corporate governance systems on the firm value symmetrical between different institution‐ al contexts? Do the financial reports affect the value of the firm? What role does corporate social responsibility play as a determinant of the firm value? These and other questions are developed and scrutinized in the seven chapters that constitute this book that has been writ‐ ten by reputable academics in business from different latitudes. Hence, the major purpose of this edited volume is to discuss the most contemporary state of the determinants of the firm value. This book presents theoretical works as well as empirical studies that contrast the ar‐

This text is conveniently organized in two comprehensive sections. The first one is led by an introductory chapter that discusses relevant concepts associated with the determination of the firm value as well as an elegant presentation of the most influential theoretical consider‐ ations. The second chapter corresponds to an empirical application of the determining ele‐ ments of the share price of companies in Oman. The third chapter studies how the free float ratio, that is, the number of shares adjusted by those in the hands of the government, refer‐

guments offered by the leading, ground-breaking theories on the firm value.
