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Corporate governance

About: Corporate governance is a research topic. Over the lifetime, 118591 publications have been published within this topic receiving 2793582 citations.


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Journal ArticleDOI
TL;DR: It is confirmed that, in the early 1990s, analysts issue more pessimistic recommendations for firms with high CSR ratings, but analysts progressively assess these firms more optimistically over time.
Abstract: We explore the impact of corporate social responsibility (CSR) ratings on sell-side analysts’ assessments of firms’ future financial performance. We suggest that when analysts perceive CSR as an agency cost, due to the prevalence of an agency logic, they produce pessimistic recommendations for firms with high CSR ratings. Moreover, we theorize that over time, the emergence of a stakeholder focus, and the gradual weakening of the agency logic, shifts the analysts’ perceptions of CSR ratings and results in increasingly less pessimistic recommendations for firms with high CSR ratings. Using a large sample of publicly traded US firms over 15 years, we confirm that in the early 1990s, analysts issue more pessimistic recommendations for firms with high CSR ratings. However, in more recent years analysts progressively assess these firms less pessimistically, and eventually they assess them optimistically. Furthermore, we find that more experienced analysts and analysts at higher-status brokerage houses are the first to shift the relation between CSR ratings and investment recommendation optimism. We find no significant link between firms’ CSR ratings and analysts’ forecast errors, indicating that learning is unlikely to account for the observed shifts in recommendations.

511 citations

Journal ArticleDOI
TL;DR: Social, political, and ecological aspects of a transformation in governance of Chile's coastal marine resources, from 1980 to today, are explored, which includes a revolutionary national system of marine tenure that allocates user rights and responsibilities to fisher collectives.
Abstract: Marine ecosystems are in decline. New transformational changes in governance are urgently required to cope with overfishing, pollution, global changes, and other drivers of degradation. Here we explore social, political, and ecological aspects of a transformation in governance of Chile's coastal marine resources, from 1980 to today. Critical elements in the initial preparatory phase of the transformation were (i) recognition of the depletion of resource stocks, (ii) scientific knowledge on the ecology and resilience of targeted species and their role in ecosystem dynamics, and (iii) demonstration-scale experimental trials, building on smaller-scale scientific experiments, which identified new management pathways. The trials improved cooperation among scientists and fishers, integrating knowledge and establishing trust. Political turbulence and resource stock collapse provided a window of opportunity that triggered the transformation, supported by new enabling legislation. Essential elements to navigate this transformation were the ability to network knowledge from the local level to influence the decision-making processes at the national level, and a preexisting social network of fishers that provided political leverage through a national confederation of artisanal fishing collectives. The resultant governance scheme includes a revolutionary national system of marine tenure that allocates user rights and responsibilities to fisher collectives. Although fine tuning is necessary to build resilience of this new regime, this transformation has improved the sustainability of the interconnected social-ecological system. Our analysis of how this transformation unfolded provides insights into how the Chilean system could be further developed and identifies generalized pathways for improved governance of marine resources around the world.

511 citations

01 Jan 2003
TL;DR: Lang et al. as mentioned in this paper used a sample of over 2,500 firms from 27 countries to investigate the relation between ownership structure, analyst following, investor protection and valuation, and found that analysts are less likely to follow firms with potential incentives to withhold or manipulate information.
Abstract: This paper uses a sample of over 2,500 firms from 27 countries to investigate the relation between ownership structure, analyst following, investor protection and valuation. We find that analysts are less likely to follow firms with potential incentives to withhold or manipulate information, such as when the Family/Management group is the largest control rights blockholder. Further, this relation is stronger for firms from low shareholder protection countries. Using valuation regressions that take into account potential endogeneity between analyst following and firm value, we find a positive valuation effect when analysts cover firms that have both potentially poor internal governance and weak country-level external governance. Overall, our findings suggest that corporate governance plays an important role in analysts’ willingness to follow firms and that increased analyst following is associated with higher valuations, particularly for firms likely to face governance problems. • Email addresses for the authors are langm@bschool.unc.edu, finkvl@business.utah.edu, damiller@indiana.edu. We thank Richard Leftwich (the editor) and an anonymous referee for detailed suggestions on improving the paper. We also thank Yiorgos Allayannis, Amy Dittmar, William Goetzmann, Rebecca Hahn, Ole-Kristian Hope, Mike Lemmon, Yvonne Lu, Marlene Plumlee, Dan Rogers and seminar participants at McGill University, Swedish School of Economics, University of Arizona, University of Oregon, University of Southern California, University of Utah, and University of Virginia (Darden) and for helpful comments. Laura Knudson, Alan Montgomery, and Ugur Lel provided valuable research assistance. We are grateful for analyst forecast information provided by I/B/E/S Inc. and ownership data from Mara Faccio and Larry Lang. Miller acknowledges financial support from a DaimlerChrysler Faculty Fellowship. A previous version of the paper was entitled “Do analysts matter most when investors are protected least? International evidence.”

510 citations

Posted Content
TL;DR: In this article, the authors use firm level survey data to present evidence on the relative importance of different features of the business environment, and they find that maintaining political stability, keeping crime under control, and undertaking financial sector reforms to relax financing constraints are likely to be the most effective routes to promote firm growth.
Abstract: What role does the business environment play in promoting and restraining firm growth? Recent literature points to a number of factors as obstacles to growth. Inefficient functioning of financial markets, inadequate security and enforcement of property rights, poor provision of infrastructure, inefficient regulation and taxation, and broader governance features such as corruption and macroeconomic stability are discussed without any comparative evidence on their ordering. In this paper, the authors use firm level survey data to present evidence on the relative importance of different features of the business environment. They find that although firms report many obstacles to growth, not all the obstacles are equally constraining. Some affect firm growth only indirectly through their influence on other obstacles, or not at all. Using Directed Acyclic Graph methodology as well as regressions, the authors find that only obstacles related to finance, crime, and political instability directly affect the growth rate of firms. Robustness tests further show that the finance result is the most robust of the three. These results have important policy implications for the priority of reform efforts. They show that maintaining political stability, keeping crime under control, and undertaking financial sector reforms to relax financing constraints are likely to be the most effective routes to promote firm growth.

510 citations

Journal ArticleDOI
TL;DR: In a recent book, "Pay without Performance: The Unfulfilled Promise of Executive Compensation" as discussed by the authors, Bebchuk and Fried critique existing executive pay arrangements and the corporate governance processes that produce them.
Abstract: Executive Overview In a recent book, Pay without Performance: The Unfulfilled Promise of Executive Compensation, Bebchuk and Fried critique existing executive pay arrangements and the corporate governance processes that produce them. They also put forward proposals for improving both executive pay and corporate governance. This paper provides an overview of the main elements of their critique and proposals. The authors show that, under current legal arrangements, boards cannot be expected to contract at arm's length with the executives whose pay they set. They discuss how managers' influence can explain many features of the executive compensation landscape, including ones that researchers subscribing to the arm's-length contracting view have long considered as puzzling. The authors also explain how managerial influence can lead to inefficient arrangements that generate weak or even perverse incentives, as well as to arrangements that make the amount and performance-insensitivity of pay less transparent. F...

510 citations


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Performance
Metrics
No. of papers in the topic in previous years
YearPapers
20251
202415
20239,644
202219,289
20215,513
20206,174