Journal ArticleDOI
R2 around the world: New theory and new tests
Li Jin,Stewart C. Myers +1 more
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TLDR
This article showed that lack of transparency increases R2 by shifting firm-specific risk to managers and that opaque stocks with high R2s are also more likely to crash, that is, to deliver large negative returns.About:
This article is published in Journal of Financial Economics.The article was published on 2006-02-01. It has received 1468 citations till now. The article focuses on the topics: Corporate governance & Stock (geology).read more
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Waiting for Guidance: Disclosure Noise, Verification Delay, and the Value-Relevance of Good-News versus Bad-News Management Earnings Forecasts
TL;DR: This article showed that bad-news management earnings forecasts show much lower dispersion around final earnings and, unlike good-news forecasts, they become considerably more accurate over time, providing direct support for the hypothesis that management perceives incentives to verify information when the news is bad as well as to delay bad news announcements to allow time to gather additional information.
Journal ArticleDOI
Internal Control Weakness and Stock Price Crash Risk
Siwoon Hong,Jong Eun Lee +1 more
TL;DR: In this paper, the authors investigate the impact of internal control weakness on stock price crash risk, using the disclosures under Section 404 of the 2002 Sarbanes-Oxley Act.
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Are financially constrained firms susceptible to a stock price crash?
TL;DR: The authors investigated whether and how financial constraints on firms affect the risk of their stock price crashing and found strong evidence that financial constraints increase future stock price crash risk, and provided evidence to suggest that bad news hoarding and default risk explain the crash risk of financially constrained firms.
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Measuring Corporate Governance in Germany: An Integrated Framework on Compliance and Transparency & Disclosure
Andrea Graf,Markus Stiglbauer +1 more
TL;DR: In this article, the authors present a broad spectrum of criteria for evaluating corporate compliance and governance transparency and disclosure in Germany, covering all rules of the German Corporate Governance Code as well as additional criteria, enabling investors to analyse how companies are managed.
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Depoliticization and market efficiency: Evidence from China#
TL;DR: In this paper , the authors investigate changes in stock price efficiency for politically connected corporations in China and find that price synchronicity, an inverse measure of price efficiency, declines significantly when firms lose political connections.
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Theory of the firm: Managerial behavior, agency costs and ownership structure
TL;DR: In this article, the authors draw on recent progress in the theory of property rights, agency, and finance to develop a theory of ownership structure for the firm, which casts new light on and has implications for a variety of issues in the professional and popular literature.
Posted Content
Law and Finance
Rafael La Porta,Rafael La Porta,Florencio Lopez de Silanes,Florencio Lopez de Silanes,Andrei Shleifer,Andrei Shleifer,Robert W. Vishny,Robert W. Vishny +7 more
TL;DR: This paper examined legal rules covering protection of corporate shareholders and creditors, the origin of these rules, and the quality of their enforcement in 49 countries and found that common law countries generally have the best, and French civil law countries the worst, legal protections of investors.
Journal ArticleDOI
Risk, Return, and Equilibrium: Empirical Tests
Eugene F. Fama,James D. MacBeth +1 more
TL;DR: In this article, the relationship between average return and risk for New York Stock Exchange common stocks was tested using a two-parameter portfolio model and models of market equilibrium derived from the two parameter portfolio model.
Journal ArticleDOI
Law and Finance
TL;DR: In this article, the authors examined legal rules covering protection of corporate shareholders and creditors, the origin of these rules, and the quality of their enforcement in 49 countries and found that common-law countries generally have the strongest, and French civil law countries the weakest, legal protections of investors, with German- and Scandinavian-civil law countries located in the middle.
Journal ArticleDOI
Investor Protection and Corporate Governance
TL;DR: In this article, the authors argue that the legal approach is a more fruitful way to understand corporate governance and its reform than the conventional distinction between bank-centered and market-centered financial systems, and discuss the possible origins of these differences, summarize their consequences, and assess potential strategies of corporate governance reform.