Abstract

http://ssrn.com/abstract=1929116
 
 

References (44)



 


 



Executives' Horizon, Internal Governance and Stock Market Liquidity


Pawan Jain


Central Michigan University

Christine X. Jiang


University of Memphis - Fogelman College of Business and Economics

Mohamed A. Mekhaimer


Clarkson University; Mansoura University - Faculty of Commerce

June 22, 2016

Journal of Corporate Finance, Forthcoming

Abstract:     
In this article, we examine whether internal governance, the process through which subordinate managers effectively monitor the chief executive officer (CEO), can improve a firm’s liquidity. Using the difference in horizons between a CEO and his immediate subordinates to measure internal governance, we show that firms with better internal governance have lower information asymmetry and higher liquidity. Further, we show that internal governance is effective in enhancing liquidity for firms with CEOs close to retirement, firms that require higher firm-specific skills, and firms with experienced subordinate managers. Our results are robust to inclusion of conventional governance measures, alternative model specifications, and different measures of internal governance and liquidity.

Number of Pages in PDF File: 51

Keywords: executives’ horizon, internal governance, corporate governance, subordinate managers, liquidity

JEL Classification: G30, G34, G39


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Date posted: September 19, 2011 ; Last revised: June 23, 2016

Suggested Citation

Jain, Pawan and Jiang, Christine X. and Mekhaimer, Mohamed A., Executives' Horizon, Internal Governance and Stock Market Liquidity (June 22, 2016). Journal of Corporate Finance, Forthcoming. Available at SSRN: http://ssrn.com/abstract=1929116 or http://dx.doi.org/10.2139/ssrn.1929116

Contact Information

Pawan Jain (Contact Author)
Central Michigan University ( email )
Mt. Pleasant, MI 48858
United States
Christine X. Jiang
University of Memphis - Fogelman College of Business and Economics ( email )
Memphis, TN 38152
United States
901-678¿5315 (Phone)
901-678¿2685 (Fax)
Mohamed A. Mekhaimer
Mansoura University - Faculty of Commerce ( email )
Mansoura, 35516
Egypt
Clarkson University ( email )
Potsdam, NY 13676
United States
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