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Conference Paper: Governance Through Trading on Acquisitions of Public Firms
| Title | Governance Through Trading on Acquisitions of Public Firms |
|---|---|
| Authors | |
| Issue Date | 2017 |
| Citation | 2nd Annual Financial Institutions, Regulation and Corporate Governance (FIRCG) Conference: From CEO pay to tennis prize money: Is it (just) about skill?, University of Melbourne, Melbourne, Australia, 28-30 January 2017 How to Cite? |
| Abstract | We identify an important channel, acquisitions of public targets, via which governance through trading (GTT) improves firm values. The disciplinary effect of GTT on the announcement returns is more pronounced for acquiring firms with higher managerial wealth-performance sensitivity, moderate institutional ownership concentration, and after Decimalization. Moreover, we show that firms with larger GTT experience higher subsequent operating performance and firm value. Our results are robust to controlling for E- and G-index and measures of price informativeness. We conduct several exercises to rule out alternative explanations, such as institutional superior information, investor activism, and momentum. Results also show that the disciplinary effect of GTT only exists for less-financially-constrained firms and non-all-cash deals. |
| Description | Session# 2B:Governance |
| Persistent Identifier | http://hdl.handle.net/10722/244499 |
| DC Field | Value | Language |
|---|---|---|
| dc.contributor.author | Chang, EC | - |
| dc.contributor.author | Lin, TC | - |
| dc.contributor.author | Ma, X | - |
| dc.date.accessioned | 2017-09-18T01:53:36Z | - |
| dc.date.available | 2017-09-18T01:53:36Z | - |
| dc.date.issued | 2017 | - |
| dc.identifier.citation | 2nd Annual Financial Institutions, Regulation and Corporate Governance (FIRCG) Conference: From CEO pay to tennis prize money: Is it (just) about skill?, University of Melbourne, Melbourne, Australia, 28-30 January 2017 | - |
| dc.identifier.uri | http://hdl.handle.net/10722/244499 | - |
| dc.description | Session# 2B:Governance | - |
| dc.description.abstract | We identify an important channel, acquisitions of public targets, via which governance through trading (GTT) improves firm values. The disciplinary effect of GTT on the announcement returns is more pronounced for acquiring firms with higher managerial wealth-performance sensitivity, moderate institutional ownership concentration, and after Decimalization. Moreover, we show that firms with larger GTT experience higher subsequent operating performance and firm value. Our results are robust to controlling for E- and G-index and measures of price informativeness. We conduct several exercises to rule out alternative explanations, such as institutional superior information, investor activism, and momentum. Results also show that the disciplinary effect of GTT only exists for less-financially-constrained firms and non-all-cash deals. | - |
| dc.language | eng | - |
| dc.relation.ispartof | Financial Institutions, Regulation & Corporate Governance (FIRCG) Conference, 2017 | - |
| dc.title | Governance Through Trading on Acquisitions of Public Firms | - |
| dc.type | Conference_Paper | - |
| dc.identifier.email | Chang, EC: ecchang@hku.hk | - |
| dc.identifier.email | Lin, TC: chunlin@hku.hk | - |
| dc.identifier.email | Ma, X: xrma@business.hku.hk | - |
| dc.identifier.authority | Chang, EC=rp01050 | - |
| dc.identifier.authority | Lin, TC=rp01077 | - |
| dc.identifier.hkuros | 276912 | - |