Abstract

http://ssrn.com/abstract=1906326
 
 

References (62)



 


 



Good Monitoring, Bad Monitoring


Yaniv Grinstein


Cornell University - Samuel Curtis Johnson Graduate School of Management

Stefano Rossi


Krannert School of Management; Centre for Economic Policy Research (CEPR)

April 2014

European Corporate Governance Institute (ECGI) - Finance Working Paper No. 418/2014

Abstract:     
Are courts effective monitors of corporate decisions? In a controversial landmark case, the Delaware Supreme Court held directors personally liable for breaching their fiduciary duties, signaling a sharp increase in Delaware’s scrutiny over corporate decisions. In our event study, low-growth Delaware firms outperformed matched non-Delaware firms by 1% in the three day event window. In contrast, high-growth Delaware firms under-performed by 1%. Contrary to previous literature, we conclude that court decisions can have large, significant and heterogeneous effects on firm value, and that rules insulating directors from court scrutiny benefit the fastest growing sectors of the economy.

Number of Pages in PDF File: 72

Keywords: monitoring, corporate governance, case law, regulation

JEL Classification: G32, G34, G38

working papers series





Download This Paper

Date posted: August 7, 2011 ; Last revised: April 30, 2014

Suggested Citation

Grinstein, Yaniv and Rossi, Stefano, Good Monitoring, Bad Monitoring (April 2014). European Corporate Governance Institute (ECGI) - Finance Working Paper No. 418/2014. Available at SSRN: http://ssrn.com/abstract=1906326 or http://dx.doi.org/10.2139/ssrn.1906326

Contact Information

Yaniv Grinstein (Contact Author)
Cornell University - Samuel Curtis Johnson Graduate School of Management ( email )
Sage Hall
Ithaca, NY 14853
United States
607-255-8686 (Phone)
607-254-4590 (Fax)

Stefano Rossi
Krannert School of Management ( email )
West Lafayette, IN 47907-1310
United States
Centre for Economic Policy Research (CEPR) ( email )
77 Bastwick Street
London, EC1V 3PZ
United Kingdom
Feedback to SSRN


Paper statistics
Abstract Views: 4,404
Downloads: 472
Download Rank: 34,130
References:  62

© 2014 Social Science Electronic Publishing, Inc. All Rights Reserved.  FAQ   Terms of Use   Privacy Policy   Copyright   Contact Us
This page was processed by apollo7 in 0.360 seconds