Legal Protection of Investors, Corporate Governance, and Investable Premia in Emerging Markets
National University of Ireland, Maynooth (NUI Maynooth) - Department of Economics
University of Limerick
University of Limerick- Kemmy Business School
January 15, 2012
We examine the interaction between the legal protection of investors, corporate governance within firms, institutional development between countries, and investable premia in emerging markets. In a multi country setting and using a novel dataset we find that better-governed firms experience significantly greater stock price increases upon equity market liberalization. We look to see whether well-governed firms in poorly governed countries enjoy an investability premium as measured by Tobin’s q. We find they do. Investors look beyond the seemingly weak country-level governance structures, and focus on corporate governance.
Number of Pages in PDF File: 34
Keywords: Investability, Corporate Governance, Tobin’s q, Emerging Markets
JEL Classification: G15, G30, G34working papers series
Date posted: January 16, 2012
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