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

December 1, 2015


Abstract:     
In this paper, we examine whether internal governance, the process through which subordinate managers effectively monitor the 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: 47

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: April 9, 2016

Suggested Citation

Jain, Pawan and Jiang, Christine X. and Mekhaimer, Mohamed A., Executives' Horizon, Internal Governance and Stock Market Liquidity (December 1, 2015). 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
Clarkson University ( email )
Potsdam, NY 13676
United States
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