This study examines the effect of firm-level corporate governance on the cost of equity capital in emerging markets and how the effect is influenced by country-level legal protection of investors. We find that firm-level corporate governance has a significantly negative effect on the cost of...

In this paper, we examine the effect of shareholder rights on reducing the cost of equity and the impact of agency problems from free cash flow on this effect. We find that firms with strong shareholder rights have a significantly lower implied cost of equity after controlling for risk factors,...

Based on a difference-in-differences approach, we find strong evidence that the initial enforcement of insider trading laws improves capital allocation efficiency. The effect is concentrated in developed markets and manifests shortly after the enforcement year. Cross-sectional analyses show that...

Executive pay disparity, as measured by CEO pay slice (CPS), is positively associated with the implied cost of equity, even after controlling for other determinants of the cost of equity. The difference in the cost of equity can explain 43% of the difference in the valuation effect attributable...

From 1996 to 1998, listed companies in China were required to achieve a minimum return on equity (ROE) of 10 percent in each of the previous three years before they could apply for permission to issue additional shares. Hence, there was a heavy concentration of ROEs in the area of just above 10...

To deter financial misstatements, many companies have recently adopted compensation recovery policies – commonly known as “clawbacks” – that authorize the board to recoup compensation paid to executives based on misstated financial reports. Clawbacks have been shown to reduce financial...

In contrast to research showing that private litigation discourages audit clients from disclosing internal control weaknesses, we find that auditors' litigation concerns have a countervailing effect. Our empirical results show that adverse internal control opinions reduces the likelihood of...

This paper examines whether and how auditors are disciplined for audit errors. Taking advantage of the long history of auditor identity data from China, we find that signing auditors with client restatements are likely to lose the privilege of signing the audit reports of public clients....

While firm-initiated compensation recovery (or clawback) provisions are gaining popularity and the recently enacted Dodd-Frank Act seeks to make the clawback of erroneously awarded compensation mandatory for all listed companies, little is known about their effectiveness. We find that the...

Over the last decade, many researchers have focused on the study of different urban hierarchies and their evolution over time. These studies may or may not confirm Zipf’s law and emphasize the characteristics of urban growth. The question is then whether urban growth depends upon city-size or...