Abstract

http://ssrn.com/abstract=595821
 
 

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How Important is Corporate Governance?


David F. Larcker


Stanford University - Graduate School of Business

Scott A. Richardson


London Business School

A. Irem Tuna


London Business School

May 2005


Abstract:     
We examine the relation between a broad set of corporate governance indicators and various measures of managerial decision making and organizational performance. Using a sample of 2,106 firms, we distill 39 structural measures of corporate governance (e.g., board characteristics, stock ownership, institutional ownership, activist stock ownership, existence of debt-holders, mix of executive compensation, and anti-takeover variables) into 14 governance constructs using principal components analysis. We find that these 14 constructs are related to operating performance, have a somewhat mixed association with abnormal accruals, Tobin's Q, and excess stock returns, and little relation to class action lawsuits and accounting restatements.

Number of Pages in PDF File: 77

Keywords: Corporate governance

JEL Classification: G34, M41, M43, M49, G32

working papers series


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Date posted: September 28, 2004  

Suggested Citation

Larcker, David F. and Richardson, Scott A. and Tuna, A. Irem, How Important is Corporate Governance? (May 2005). Available at SSRN: http://ssrn.com/abstract=595821 or http://dx.doi.org/10.2139/ssrn.595821

Contact Information

David F. Larcker
Stanford University - Graduate School of Business ( email )
Graduate School of Business
518 Memorial Way
Stanford, CA 94305-5015
United States
650-725-6159 (Phone)

Scott Anthony Richardson
London Business School ( email )
Sussex Place
Regent's Park
London, London NW1 4SA
United Kingdom
Ayse Irem Tuna (Contact Author)
London Business School ( email )
Sussex Place
Regent's Park
London, London NW1 4SA
United Kingdom
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