This paper explores the role of corporate governance in the Asian crisis countries: Korea, Indonesia, Malaysia and Thailand. It argues that the focus in an analysis of corporate governance should be on the provision of external equity finance -the position of outside minority shareholders. The proportion of equity finance in the capital structure of firms is highly correlated with the status of...

This paper attempts to provide large sample evidence of opportunistic related party transactions in China where economic institutions, legal system and corporate structures are conducive to such dealings. We found that firms belonging to a corporate group report abnormally high levels of related party sales when they have incentives to manage earnings to avoid being delisted, or prior to issuin...

This appendix contains tables and figures that supplement the analysis in the paper. Section A presents the asset pricing test results with equity issuance cost shocks constructed using alternative definitions of equity issuance. Section B presents the asset pricing test results with equity issuance cost shocks constructed by taking averages of portfolio-level equity issuance shocks across port...

The pledge of equity causes a serious deviation between the cash flow rights and voting controlling shareholders, which may lead to shareholders using their position harm interests small medium-sized information management cover up tunneling behavior, reducing transparency company information. This article uses data from A-share listed companies in Shanghai Shenzhen 2003 2019 empirically test i...

Adopting fair value measurement may bring more earnings fluctuations and induce irrational psychology radical financing behavior of managers major shareholders. Based on behavioral corporate governance theory, using the sample A-share nonfinancial listed companies China during 2015–2017, this paper empirically examines regulatory effect measurement; that is, whether affects company’s decisions ...

This paper provides an empirical link between the expected cost of equity and firms’ Seasoned Equity Offerings activities, using a novel measure of forward-looking cost of equity. There is a negative impact of expected cost equity on SEO likelihood and amount of proceeds, exists on both market and firm level. Empirical evidence suggests that the negative SEO announcement effect and post-SEO lon...

For several decades, American corporate scholars assumed the inevitability of the widely held Berle and Means' corporation. The argument was simple. In a rapidly developing industrial economy, economic prosperity dictated the infusion of massive amounts of capital into owner-managed corporations. Without ample capital, entrepreneurs would be unable to realize the scale economies or technologica...

This article presents a contingent claim valuation of a callable convertible bond with the issuer’s credit risk. The optimal call, voluntary conversion, and bankruptcy strategies are jointly determined by shareholders and bondholders to maximize the equity value and the bond value, respectively. This model not only incorporates tax benefits, bankruptcy costs, refunding costs, and a call notice ...

This paper proposes the introduction of a consumption-based corporate income tax in the European Union. Our proposal would guarantee neutrality regarding investment decisions and at the same time increase cost-efficiency. The proposal is based on the S-base cash flow tax, where transactions within the corporate sector are not at all taxable and only transactions between shareholders and corpora...

Recent work documents that better legal institutions are associated with broader equity markets. We investigate whether differences in legal institutions also help explain the international cross-section of expected stock returns. Three main regularities emerge. First, total stock market returns are positively correlated with overall measures of the quality of institutions, such as judicial eff...