Corporate Governance and Expected Stock Returns PDF Download

Author: Andreas Schillhofer
Publisher: Springer-Verlag
ISBN: 3322815609
Category : Business & Economics
Languages : de
Pages : 210

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Book Description
Based on his Corporate Governance Rating (CGR) for German firms, Andreas Schillhofer documents a positive relationship between the CGR and firm value. In addition, there is strong evidence that expected returns are negatively correlated with the CGR if dividend yields and price-earnings ratios are used as proxies for the cost of capital.

Author: Wolfgang Drobetz
Publisher:
ISBN:
Category :
Languages : en
Pages : 51

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Recent empirical work shows that a better legal environment leads to lower expected rates of return in an international cross-section of countries. This paper investigates whether differences in firm-specific corporate governance also help to explain expected returns in a cross-section of firms within a single jurisdiction. Constructing a corporate governance rating (CGR) for German firms, we document a positive relationship between the CGR and firm value. In addition, there is strong evidence that expected returns are negatively correlated with the CGR, if dividend yields and price-earnings ratios are used as proxies for the cost of capital. Most results are robust for endogeneity, with causation running from corporate governance practices to firm fundamentals. Finally, an investment strategy that bought high-CGR firms and shorted low-CGR firms would have earned abnormal returns of around 12 percent on an annual basis during the sample period. We rationalize the empirical evidence with lower agency costs and/or the removal of certain governance malfunctions for the high-CGR firms.

Author: Wolfgang Drobetz
Publisher:
ISBN:
Category :
Languages : en
Pages :

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Author:
Publisher:
ISBN:
Category :
Languages : en
Pages : 52

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Author: Theodore Clark Moorman
Publisher:
ISBN:
Category :
Languages : en
Pages :

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Extant literature finds that long-term abnormal stock returns are generated by a strategy based on corporate governance index values (Gompers, Ishii, and Metrick2003). The result is inconsistent with efficient markets and suggests that information about governance is not accurately reflected in market data. Control firm portfolios are used to mitigate model misspecification in measuring long-term abnormal returns. Using a number of different matching criteria and governance indices, no long-term abnormal returns are found to trading strategies based on corporate governance. The effect of a change in governance on firm value is mixed, but some support is found for poor governance destroying firm value. These results have a number of implications for practitioners, researchers, and policy makers.

Author: James P. Hawley
Publisher: University of Pennsylvania Press
ISBN: 0812204646
Category : Business & Economics
Languages : en
Pages : 351

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Book Description
Corporate governance, the internal policies and leadership that guide the actions of corporations, played a major part in the recent global financial crisis. While much blame has been targeted at compensation arrangements that rewarded extreme risk-taking but did not punish failure, the performance of large, supposedly sophisticated institutional investors in this crisis has gone for the most part unexamined. Shareholding organizations, such as pension funds and mutual funds, hold considerable sway over the financial industry from Wall Street to the City of London. Corporate Governance Failures: The Role of Institutional Investors in the Global Financial Crisis exposes the misdeeds and lapses of these institutional investors leading up to the recent economic meltdown. In this collection of original essays, edited by pioneers in the field of fiduciary capitalism, top legal and financial practitioners and researchers discuss detrimental actions and inaction of institutional investors. Corporate Governance Failures reveals how these organizations exposed themselves and their clientele to extremely complex financial instruments, such as credit default swaps, through investments in hedge and private equity funds as well as more traditional equity investments in large financial institutions. The book's contributors critique fund executives for tolerating the "pursuit of alpha" culture that led managers to pursue risky financial strategies in hopes of outperforming the market. The volume also points out how and why institutional investors failed to effectively monitor such volatile investments, ignoring relatively well-established corporate governance principles and best practices. Along with detailed investigations of institutional investor missteps, Corporate Governance Failures offers nuanced and realistic proposals to mitigate future financial pitfalls. This volume provides fresh perspectives on ways institutional investors can best act as gatekeepers and promote responsible investment.

Author: Randall K. Morck
Publisher: University of Chicago Press
ISBN: 0226536831
Category : Business & Economics
Languages : en
Pages : 700

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Book Description
For many Americans, capitalism is a dynamic engine of prosperity that rewards the bold, the daring, and the hardworking. But to many outside the United States, capitalism seems like an initiative that serves only to concentrate power and wealth in the hands of a few hereditary oligarchies. As A History of Corporate Governance around the World shows, neither conception is wrong. In this volume, some of the brightest minds in the field of economics present new empirical research that suggests that each side of the debate has something to offer the other. Free enterprise and well-developed financial systems are proven to produce growth in those countries that have them. But research also suggests that in some other capitalist countries, arrangements truly do concentrate corporate ownership in the hands of a few wealthy families. A History of Corporate Governance around the World provides historical studies of the patterns of corporate governance in several countries-including the large industrial economies of Canada, France, Germany, Italy, Japan, the United Kingdom, and the United States; larger developing economies like China and India; and alternative models like those of the Netherlands and Sweden.

Author: Thomas Clarke
Publisher: Taylor & Francis
ISBN: 1317610555
Category : Business & Economics
Languages : en
Pages : 733

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Book Description
This new edition of Thomas Clarke’s popular International Corporate Governance offers a comprehensive guide to understanding corporate governance as a discipline, while incorporating new case studies and material that takes account of the implications of the global financial crisis and the continuing sustainability crisis.

Author: Abol Jalilvand
Publisher: Routledge
ISBN: 1136644903
Category : Business & Economics
Languages : en
Pages : 496

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Book Description
The asymmetry of responsibilities between management and corporate governance both for day-to-day operations and the board’s monthly or quarterly review and evaluation remains an unresolved challenge. Expertise in the area of risk management is a fundamental requirement for effective corporate governance, if not by all, certainly by some board members. This means that along with board committees such as "compensation", "audit", "strategy" and several others, "risk management" committees must be established to monitor the likelihood of certain events that may cause the collapse of the firm. Risk Management and Corporate Governance allows academics and practitioners to assess the state of international research in risk management and corporate governance. The chapters overlay the areas of risk management and corporate governance on both financial and operating decisions of a firm while treating legal and political environments as externalities to decisions undertaken.

Author: Ciaran Driver
Publisher: Oxford University Press
ISBN: 0192527665
Category : Business & Economics
Languages : en
Pages : 298

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Book Description
Corporate governance is a complex idea that is often inappropriately simplified as a cookbook of recommended measures to improve financial performance. Meta studies of published research show that the supposed benign effects of these measures - independent directors or highly incentivised executives - are at best context-specific. There is thus a challenge to explain the meaning, purpose, and importance of corporate governance. This volume addresses these issues. The issues discussed centre on relationships within the firm e.g. between labour, managers, and investors, and relationships outside the firm that affect consumers or the environment. The essays in this collection are the considered selection by the editors and the contributors themselves of what are seen as some of the most weighty and urgent issues that connect the corporation and society at large in developed economies with established property rights. The essays are to be read in dialogue with each other, giving a richer understanding than could be obtained by shepherding all contributions into a single mould. Nevertheless taken together they demonstrate a shared sense of deep concern that the corporate governance agenda has been and still is on the wrong track. The contributors, individually and collectively, identify in this compendium both a research programme and a platform for change.