[2007년 제 1차] Corporate governance and firm value: Endogeneity-fr
작성자 : 관리자
조회수 : 1021
게시일 :
2007-03-01
This paper provides evidence of the causal relation between corporate governance and firm value, which is free from the endogeneity problems. A unique experimental setting is created by the first target announcement of an investment vehicle that focuses its attention exclusively on companies whose stocks are undervalued due to governance problems. We examine the stock price reaction of other firms to the announcement, and find that those companies whose governance qualities are poorer experience a more positive stock price reaction, even after controlling for the valuation level. This finding is consistent with the presence of potential gains accruing to outside investors from improving the quality of corporate governance, and thus shows that governance plays an independent role in determining the market value of a company.