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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Stock liquidity and stock prices crash-risk: Evidence from India
TL;DR: In this paper, the role of stock liquidity as a governance mechanism to discipline managers for withholding bad news (stock price crash risk) is examined, and two possible mechanisms through which stock liquidity reduces stock price crash-risk are identified: the threat of intervention and price informativeness.
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Macroeconomic Factors and Stock Price Crash Risk: Do Managers Withhold Bad News in the Crisis-Ridden Iran Market?
TL;DR: In this article, the effects of macroeconomic variables on stock price crash risk in the economically uncertain conditions of Iran's market were investigated. And the results showed that there is a positive association between the inflation and unemployment rates and stock price Crash risk, whereas the GDP and exchange rates are correlated negatively with crash risk.
Journal ArticleDOI
Varying Heterogeneity among U.S. Firms: Facts and Implications
TL;DR: In this paper, the authors hypothesize that firm heterogeneity, reflected in firm-specific volatility, rises as a new general purpose technology (GPT) propagates across the economy and then ebbs once the GPT is widespread.
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Fraud commitment in a smaller world: Evidence from a natural experiment
TL;DR: In this article, the authors examined the effect of proximity on corporate fraud commitment using the introduction of high-speed rail (HSR) as an exogenous shock to travel time.
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Voluntary Fair Value Disclosures Beyond SFAS 157's Three-Level Estimates
TL;DR: This paper found that firms with more opaque estimates are more likely to provide such disclosures and found that these disclosures improve investors' perception about the reliability of fair value estimates, and that they are associated with higher market pricing and lower information risk for Level 3 estimates.
References
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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.
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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.