To Steal or Not to Steal: Firm Attributes, Legal Environment, and Valuation
Data on corporate governance and disclosure practices reveal wide within-country variation that decreases with the strength of investors' legal protection. A simple model identifies three firm attributes related to that variation: investment opportunities, external financing, and ownership structure. Using firm-level governance and transparency data from 27 countries, we find that all three firm attributes are related to the quality of governance and disclosure practices, and firms with higher governance and transparency rankings are valued higher in stock markets. All relations are stronger in less investor-friendly countries, demonstrating that firms adapt to poor legal environments to establish efficient governance practices. Copyright 2005 by The American Finance Association.
Year of publication: |
2005
|
---|---|
Authors: | DURNEV, ART ; KIM, E. HAN |
Published in: |
Journal of Finance. - American Finance Association - AFA, ISSN 1540-6261. - Vol. 60.2005, 3, p. 1461-1493
|
Publisher: |
American Finance Association - AFA |
Saved in:
freely available
Saved in favorites
Similar items by person
-
Explaining Differences in the Quality of Governance Among Companies: Evidence from Emerging Markets
Durnev, Art, (2007)
-
Corporate Stability and Economic Growth
Durnev, Art, (2003)
-
To Steal or Not to Steal: Firm Attributes, Legal Environment, and Valuation
Durnev, Art, (2004)
- More ...