|
|
|
|
||||
|
||||
What Matters in Corporate Governance?Lucian A. BebchukHarvard Law School; National Bureau of Economic Research (NBER); European Corporate Governance Institute (ECGI) Alma CohenTel Aviv University - Eitan Berglas School of Economics; Harvard Law School; National Bureau of Economic Research (NBER) Allen FerrellHarvard Law School; European Corporate Governance Institute (ECGI) February 2009 The Review of Financial Studies, Vol. 22, Issue 2, pp. 783-827, 2009 Abstract: We investigate the relative importance of the twenty-four provisions followed by the Investor Responsibility Research Center (IRRC) and included in the Gompers, Ishii, and Metrick governance index (Gompers, Ishii, and Metrick 2003). We put forward an entrenchment index based on six provisions: staggered boards, limits to shareholder bylaw amendments, poison pills, golden parachutes, and supermajority requirements for mergers and charter amendments. We find that increases in the index level are monotonically associated with economically significant reductions in firm valuation as well as large negative abnormal returns during the 1990-2003 period. The other eighteen IRRC provisions not in our entrenchment index were uncorrelated with either reduced firm valuation or negative abnormal returns.
Keywords: G30, G34, K22 Accepted Paper SeriesDate posted: January 25, 2009Suggested CitationContact Information
|
|
||||||||||||||||||||||||||||||
© 2013 Social Science Electronic Publishing, Inc. All Rights Reserved.
FAQ
Terms of Use
Privacy Policy
Copyright
This page was processed by apollo3 in 0.360 seconds
