Extant literature finds that long-term abnormal stock returns are generated by a
strategy based on corporate governance index values (Gompers, Ishii, and Metrick
2003). The result is inconsistent with efficient markets and suggests that information
about governance is not accurately reflected in market data. Control firm portfolios are
used to mitigate model misspecification in measuring long-term abnormal returns.
Using a number of different matching criteria and governance indices, no long-term
abnormal returns are found to trading strategies based on corporate governance. The
effect of a change in governance on firm value is mixed, but some support is found for
poor governance destroying firm value. These results have a number of implications for
practitioners, researchers, and policy makers.
| Identifer | oai:union.ndltd.org:tamu.edu/oai:repository.tamu.edu:1969.1/2341 |
| Date | 29 August 2005 |
| Creators | Moorman, Theodore Clark |
| Contributors | Kolari, James W., Sorescu, Sorin M. |
| Publisher | Texas A&M University |
| Source Sets | Texas A and M University |
| Language | en_US |
| Detected Language | English |
| Type | Book, Thesis, Electronic Dissertation, text |
| Format | 360239 bytes, electronic, application/pdf, born digital |
Page generated in 0.0016 seconds