Corporate Governance and Firm Survival

45 Pages Posted: 3 Apr 2018

See all articles by M. Sinan Goktan

M. Sinan Goktan

California State University, East Bay

Robert Kieschnick

University of Texas at Dallas

Rabih Moussawi

Villanova University - Department of Finance; University of Pennsylvania - The Wharton School

Multiple version iconThere are 2 versions of this paper

Date Written: May 2018

Abstract

We explore how various aspects of corporate governance influence the likelihood of a public corporation surviving as a separate public entity, after addressing potential endogeneity that arises from competing corporate exit outcomes: acquisitions, going‐private transactions, and bankruptcies. We find that some corporate governance features are more important determinants of the form of a firm's exit than many economic factors that have figured prominently in prior research. We also find evidence that outsider‐dominated boards and lower restrictions on internal governance play major roles in the way firms exit public markets, particularly when a firm's industry suffers a negative shock. Overall, our results suggest that failure to recognize competing risks produces biased estimates, resulting in faulty inferences.

Keywords: corporate governance, acquisitions, going private, bankruptcy, corporate restructuring

JEL Classification: M40, M48, G33, G34

Suggested Citation

Goktan, Sinan and Kieschnick, Robert and Moussawi, Rabih, Corporate Governance and Firm Survival (May 2018). Financial Review, Vol. 53, Issue 2, pp. 209-253, 2018. Available at SSRN: https://ssrn.com/abstract=3154824 or http://dx.doi.org/10.1111/fire.12161

Sinan Goktan (Contact Author)

California State University, East Bay ( email )

25800 Carlos Bee Blvd
Hayward, CA 94542
United States
510-885-3797 (Phone)
510-885-7175 (Fax)

Robert Kieschnick

University of Texas at Dallas

2601 North Floyd Road
Richardson, TX 75083
United States

Rabih Moussawi

Villanova University - Department of Finance ( email )

800 E Lancaster Ave
Bartley Hall, 2051
Villanova, PA 19085
United States

HOME PAGE: http://www.homepage.villanova.edu/rabih.moussawi

University of Pennsylvania - The Wharton School ( email )

United States

Register to save articles to
your library

Register

Paper statistics

Downloads
0
Abstract Views
474
PlumX Metrics