Author: Paolo VolpinPublisher:
ISBN:
Category : Chief executive officers
Languages : en
Pages : 66
Book Description
Governance with Poor Investor Protection
Author: Paolo VolpinPublisher:
ISBN:
Category : Chief executive officers
Languages : en
Pages : 66
Book Description
Investor Protection and Corporate Governance
Author: Alberto ChongPublisher: Stanford University Press
ISBN: 9780804700078
Category : Business & Economics
Languages : en
Pages : 586
Book Description
Análise comparativa sobre corporação, admistração financeira, investimento na América Latina, em especial nos seguintes países: Argentina, Brasil, Chile, Colômbia, México, Venezuela.
Investor Protection and Corporate Governance
Author: Mark L. DeFondPublisher:
ISBN:
Category :
Languages : en
Pages : 64
Book Description
Recent research asserts that an essential feature of good corporate governance is strong investor protection, where investor protection is defined as both (1) the extent of the laws that protect investors' rights and (2) the strength of the legal institutions that facilitate law enforcement. The purpose of this study is to test whether the two components of investor protection are associated with an important role of good corporate governance: identifying and terminating poorly performing CEOs. Our tests find no relation between CEO turnover and firm performance in countries with extensive laws protecting investors. However, we find that CEO turnover is associated with poor firm performance in countries with strong law enforcement institutions. We also find that in countries with strong law enforcement, CEO turnover is associated with poor stock returns when stock prices are more informative, and with poor earnings otherwise. Further, our findings are robust to controlling for the influence of public opinion, the effects of block-holders, the level of financial market development, a country's legal origin, and several alternative research design specifications.Our results suggest that strong law enforcement institutions are important in fostering corporate governance mechanisms that eliminate unfit CEOs, but that extensive laws are not. This finding is consistent with: (1) limited investor protection laws being capable of cultivating good corporate governance as long as law enforcement institutions are strong; and (2) insiders (including directors and CEOs) in countries with weak law enforcement being more likely to engage in collusive behavior to expropriate shareholder wealth, thereby reducing directors' incentives to dismiss poorly performing CEOs. More generally these findings suggest that good corporate governance requires law enforcement institutions capable of protecting shareholders' property rights (i.e. protecting shareholders from expropriation by insiders), but does not require extensive shareholder protection laws.
Corporate Governance, Investor Protection, and the Home Bias
Author: Magnus DahlquistPublisher:
ISBN:
Category :
Languages : en
Pages : 48
Book Description
If investors are poorly protected, it is optimal for firms to be closely held because selling shares to minority shareholders is otherwise too expensive. Empirically, most firms in countries with poor investor protection are closely held so that investors cannot hold the market portfolio. We show that the prevalence of closely held firms in countries with poor investor protection explains part of the home bias of U.S. investors. We construct an estimate of the world portfolio of shares available to investors who are not controlling shareholders (the world float portfolio). The world float portfolio differs sharply from the world market portfolio. In regressions explaining the portfolio weights of U.S. investors, the world float portfolio has a positive significant coefficient but the world market portfolio has no additional explanatory power. This result holds when we control for country characteristics. An analysis of foreign investor holdings at the firm level for Sweden confirms the importance of the float portfolio as a determinant of these holdings.
Corporate Governance and the Shareholder Base
Author: Karl LinsPublisher:
ISBN:
Category : Corporate governance
Languages : en
Pages : 50
Book Description
"This paper uses a sample of 4,410 firms from 29 countries to investigate the relation between corporate governance and the shareholder base. In contrast to previous work, our results strongly support the notion that poor corporate governance, at both the firm and country level, negatively impacts the willingness of foreign investors to hold a firm's equity. Specifically, we find that firms whose managers have sufficiently high control rights that they may reasonably be expected to expropriate minority equity investors attract significantly less U.S. investment, especially in countries with poor external governance. Our findings suggest that the prices U.S. investors are asked to pay for firms with poor governance are not low enough to fully compensate them for expected expropriation or increased estimation risk associated with expected poor disclosure by these firms. Because prior research shows that a smaller shareholder base is associated with a lower firm value, our results are consistent with the notion that the shareholder base represents an important channel through which poor expected corporate governance contributes to a reduction in firm value"--Federal Reserve Board web site.
Corporate Governance, Investor Protection, and Performance in Emerging Markets
Author: Leora KlapperPublisher:
ISBN:
Category : Business enterprises
Languages : en
Pages : 40
Book Description
Investor Protection and Corporate Governance
Author: Florencio Lopez-de-SilanesPublisher:
ISBN:
Category : Corporate governance
Languages : en
Pages : 25
Book Description
Corporate Governance in Emerging Markets
Author: Sabri BoubakerPublisher: Springer Science & Business Media
ISBN: 3642449557
Category : Business & Economics
Languages : en
Pages : 625
Book Description
This book fills the gap between theories and practices of corporate governance in emerging markets by providing the reader with an in-depth understanding of governance mechanisms, practices and cases in these markets. It is an invaluable resource not only for academic researchers and graduate students in law, economics, management and finance but also for people practicing governance such as lawmakers, policymakers and international organizations promoting best governance practices in emerging countries. Investors can benefit from this book to better understand of these markets and to make judicious investment decisions.
Investor Protection and the Demand for Equity
Author: Mariassunta GiannettiPublisher:
ISBN:
Category :
Languages : en
Pages : 50
Book Description
Anecdotal evidence suggests that investor protection affects the demand for equity, but existing theories emphasize only the effect of investor protection on the supply of equity. We build a model showing that the demand for equity is important in explaining stock market development. If the level of investor protection is low, wealthy investors have an incentive to become controlling shareholders, because they can earn additional benefits by expropriating outside shareholders. In equilibrium, since the market price reflects the demand from both controlling and outside shareholders, the stock price of weak corporate governance stocks is not low enough to fully discount the extraction of private benefits. This generates the following empirical implications. First, stocks have lower expected return when investor protection is weak. Second, differences in stock market participation rates across countries, home equity bias and flow of foreign direct investment depend on investor protection. Finally, we uncover a good country bias in investment decisions as portfolio investors from countries with low level of investor protection hold relatively more foreign equity. We provide novel international evidence on stock market participation rates, and on holdings of domestic and foreign stocks consistent with the predictions of the model.
Author: