SYNOPSIS: The push for increased transparency in financial reporting and corporate governance serves the shareholders only up to a limit. The problem of assessing the value of transparency to the shareholders is subtle because both the level and pattern of earnings can convey information. Even when earnings management conceals information, it can be beneficial to shareholders. Distinguishing be...

This paper provides an empirical analysis of corporate governance (CG) efficiencies among Chinese listed companies (CLCs) under different types of ownership. Employing the data of over 700 CLCs in 2006, this study looks specifically into the effects of separation of controlling and residual claim rights upon CG (specifically management turnover) and firm performance under different shareholding...

In this study we use a data set that provides information on Chinese Communist Party grassroots organizations’ political control over decision-making in China’s listed firms. Specifically, we examine how different types of shareholders affect (1) the party’s level of decision-making power and (2) the performance implications of party control for firm performance. We obtain two major results. Fi...

Several papers suggest that private benefits can explain the differential pric­ ing between share classes with differential voting rights. However 1 in Brazil the price differential between voting and non-voting shares has been negative for sev­ eral companies between July 1994 and September 2002. This paper investigates the determinants that imply this discount of voting shares vis-a.-vis non-...

This paper documents frequent attempts by activist arbitrageurs to open-end discounted closed-end funds, particularly after the 1992 proxy reform which reduced the costs of communication among shareholders. Open-ending attempts have a substantial effect on discounts, reducing them, on average, to half of their original level. The size of the discount is a major determinant of whether a fund get...

We address explicitly the issue of risk in the theory of the firm. To that end, we present a model in which the shareholders’ portfolio selection of assets and the decisions of the firm are jointly determined through the market process. The model allows to study the role of markets and prices on the type of risky activities undertaken by a firm and the allocation of random profit among sharehol...

We study the impact of a unique financial anomaly—the simultaneous persistence greater cash holdings and interest-bearing debts (SP-GCHID) on stock price. Due to institutional diversity nature transition economies, high do not always stem from precautionary motive as usually claimed but can be result misappropriation debt manipulation by major shareholders. Analysing data Chinese listed firms 2...

A merger is a transaction that combines two firms, leaving one surviving entity. An acquisition is the purchase of one firm by another individual or firm. Both transactions fall under the more general heading of takeovers. Takeovers can play a constructive economic role, for example by removing inefficient management or by achieving economies of scale and complementarity. On the other hand, the...