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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: In this paper, the authors study the relationship of corporate governance policy and idiosyncratic risk and find that firms with fewer antitakeover provisions display higher levels of idiosyncratic risks, trading activity, and information about future earnings in stock prices.
Abstract: We study the relationship of corporate governance policy and idiosyncratic risk. Firms with fewer antitakeover provisions display higher levels of idiosyncratic risk, trading activity, private information flow, and information about future earnings in stock prices. Trading interest by institutions, especially those active in merger arbitrage, strengthens the relationship of governance to idiosyncratic risk. Our results indicate that openness to the market for corporate control leads to more informative stock prices by encouraging collection of and trading on private information. Consistent with an information-flow interpretation, the component of volatility unrelated to governance is associated with the efficiency of corporate investment. THE EFFECT OF CORPORATE GOVERNANCE on equity prices and the distribution of returns is an important issue in corporate finance. Gompers, Ishii, and Metrick (2003) and Cremers and Nair (2005) find that governance can directly influence equity prices. These and other authors generally posit that management constraints and incentives are the mechanisms through which governance influences prices. Any systematic effect on returns, however, also requires a link between governance provisions and investors’ expectations or information. For instance, Gompers et al. (2003) argue that in the early 1990s, investors might not have fully appreciated the agency costs engendered by weak governance. This paper extends the current understanding by showing how governance provisions and informed trading interact to influence the incorporation of information into stock prices. We test a trading link hypothesis, showing how specific aspects of governance that influence takeover vulnerability impact stock price informativeness. In particular, we focus on the specific path through the trading volume of arbitrage-oriented institutional investors. We reason that the absence of antitakeover provisions creates incentives to collect private information, which is a central determinant of idiosyncratic volatility. When trading activity is generated, it contributes to this idiosyncratic volatility and to other indications of

453 citations

Journal ArticleDOI
TL;DR: In this paper, the authors advocate an interdisciplinary framework for the analysis of environmental decisionmaking that seeks to identify legitimate and context-sensitive institutional solutions producing equitable, efficient, and effective outcomes.
Abstract: Environmental decisions made by individuals, civil society, and the state involve questions of economic efficiency, environmental effectiveness, equity, and political legitimacy. These four criteria are constitutive of the economic, social, and environmental dimensions of sustainable development, which has become the dominant rhetorical device of environmental governance. We discuss the tendency for disciplinary research to focus on particular subsets of the four criteria, and argue that such a practice promotes solutions that do not acknowledge the dynamics of scale and the heterogeneity of institutional contexts. We advocate an interdisciplinary framework for the analysis of environmental decisionmaking that seeks to identify legitimate and context-sensitive institutional solutions producing equitable, efficient, and effective outcomes. We demonstrate the usefulness of our approach by using it to examine decisions concerning contested nature conservation and multiple-use commons in the management of Hic...

452 citations

Journal ArticleDOI
TL;DR: Corporate sponsorship is growing in importance as an element of the communications mix The number of companies participating in sponsorship, as well as corporate expenditures for sponsoring events, is on the rise as organizations seek new ways to reach audiences and enhance their image.
Abstract: Corporate sponsorship is growing in importance as an element of the communications mix The number of companies participating in sponsorship, as well as corporate expenditures for sponsoring events, is on the rise as organizations seek new ways to reach audiences and enhance their image The importance of corporate sponsorship is now generally acknowledged, but little research has been done to understand its value and effectiveness An exploratory study was conducted to examine the relationship between sponsorship and corporate image The results suggest that corporate sponsorship can improve corporate image, but its effects differ among companies Moreover, sponsorship is only one of the information sources consumers use to form their impressions of an organization Under certain circumstances, corporate sponsorship can damage, rather than enhance, the image of a company

452 citations

Journal ArticleDOI
TL;DR: In this paper, the roles of board independence and CEO duality on a firm's performance are investigated based on financial ratios, namely ROA, ROE, EPS and profit margin.
Abstract: This study investigates the roles of board independence and CEO duality on a firm’s performance relying on financial ratios, namely ROA, ROE, EPS and profit margin. This paper argues that if boards and leadership structure are well in place and conform to the practices in other developed countries, the long‐term shareholder value is expected to increase and shareholder interests are also well protected. To test the roles of board independence and CEO duality, data from the KLSE Main Board companies for the 1994‐1996 financial years were used. The 1994‐1996 financial years were chosen because, during this period, the issue of corporate governance in Malaysia was not as prominent as it was during, and after, the 1997/1998 financial crisis. Thus, this period could be considered as the period during which guidelines on the structure of the board of directors were not yet available in Malaysia. The findings, generally, suggest that neither board independence, leadership structure nor the joint effects of these two showed any relations with firm performance. Findings of this study, nonetheless, showed that Malaysian companies’ boards were generally dominated by outside directors and the majority of the companies in the study practiced non‐dual leadership structures. Thus, this evidence suggests that the structure of the boards of directors in Malaysia is largely independent of management and the absence of any dominant personality.

452 citations

Journal ArticleDOI
TL;DR: In this article, accounting and finance research on corporate governance (CG) is reviewed, focusing on a particularly vexing issue, namely endogeneity in the relationships between CG and other matters of concern to accounting and financial scholars, and suggest ways to deal with it.
Abstract: We review accounting and finance research on corporate governance (CG). In the course of our review, we focus on a particularly vexing issue, namely endogeneity in the relationships between CG and other matters of concern to accounting and finance scholars, and suggest ways to deal with it. Given the advent of large commercial CG databases, we also stress the importance of how CG is measured and in particular, the construction of CG indices, which should be sensitive to local institutional arrangements, and the need to capture both internal and external aspects of governance. The ‘stickiness’ of CG characteristics provides an additional challenge to CG scholars. Better theory is required, for example, to explain whether various CG practices substitute for each other or are complements. While a multidisciplinary approach to developing better theory is never without its difficulties, it could enrich the current body of knowledge in CG. Despite the vastness of the existing CG literature, these issues do suggest a number of avenues for future research.

451 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