Corporate Governance and Information Efficiency in Security Markets

25 Pages Posted: 23 Oct 2006

See all articles by Charlie X. Cai

Charlie X. Cai

University of Liverpool Management School

Kevin Keasey

University of Leeds - Division of Accounting and Finance

Helen Short

University of Leeds - Division of Accounting and Finance

Abstract

This paper investigates a neglected topic in corporate governance research; namely, do governance characteristics affect the market reaction to news? The topic is important given the emphasis by governance regulations and codes of best practice on the need for greater transparency of corporate activities. For the first time in the corporate governance literature, we show that corporate governance characteristics (particularly the presence of founding family directors and gender diverse boards) affect the market reaction to company specific news. The results of the paper point to the analysis of the impact of governance characteristics on the market reaction to news being a new and complementary research agenda within corporate governance.

Suggested Citation

Cai, Charlie Xiaowu and Keasey, Kevin and Short, Helen, Corporate Governance and Information Efficiency in Security Markets. European Financial Management, Vol. 12, No. 5, pp. 763-787, November 2006. Available at SSRN: https://ssrn.com/abstract=939087 or http://dx.doi.org/10.1111/j.1468-036X.2006.00276.x

Charlie Xiaowu Cai

University of Liverpool Management School ( email )

University of Liverpool
Liverpool, L69 7ZA
United Kingdom

Kevin Keasey (Contact Author)

University of Leeds - Division of Accounting and Finance ( email )

Leeds LS2 9JT
United Kingdom
+44 (0)113 343 2618 (Phone)

Helen Short

University of Leeds - Division of Accounting and Finance ( email )

Leeds LS2 9JT
United Kingdom

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