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Article: Negotiated Block Trade and Rebuilding of Trust
Title | Negotiated Block Trade and Rebuilding of Trust |
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Authors | |
Keywords | Corporate governance Boards Corporate boards |
Issue Date | 2020 |
Publisher | Wiley-Blackwell Publishing, Inc. The Journal's web site is located at http://www.wiley.com/bw/journal.asp?ref=0020-6598 |
Citation | International Economic Review, 2020, v. 61 n. 2, p. 901-939 How to Cite? |
Abstract | We investigate the impact of corporate governance on customers' trust using a dynamic model of experience‐goods firm. In the optimal equilibrium, customers' trust in the firm is linked to its behavior in the market for corporate control, so that the controlling shareholder has incentives to ensure high product quality while noncontrolling shareholders' interests are protected. Following a trust‐damaging event, turnover of the controlling share block restores customers' trust and enhances total shareholder value. Our analysis identifies an endogenous cost of corporate control, offers implications for the control premium, and provides a novel rationale for the separation of ownership and control. |
Persistent Identifier | http://hdl.handle.net/10722/282487 |
ISSN | 2023 Impact Factor: 1.5 2023 SCImago Journal Rankings: 2.350 |
ISI Accession Number ID |
DC Field | Value | Language |
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dc.contributor.author | Au, PH | - |
dc.contributor.author | Fong, Y-F | - |
dc.contributor.author | Li, J | - |
dc.date.accessioned | 2020-05-15T05:28:45Z | - |
dc.date.available | 2020-05-15T05:28:45Z | - |
dc.date.issued | 2020 | - |
dc.identifier.citation | International Economic Review, 2020, v. 61 n. 2, p. 901-939 | - |
dc.identifier.issn | 0020-6598 | - |
dc.identifier.uri | http://hdl.handle.net/10722/282487 | - |
dc.description.abstract | We investigate the impact of corporate governance on customers' trust using a dynamic model of experience‐goods firm. In the optimal equilibrium, customers' trust in the firm is linked to its behavior in the market for corporate control, so that the controlling shareholder has incentives to ensure high product quality while noncontrolling shareholders' interests are protected. Following a trust‐damaging event, turnover of the controlling share block restores customers' trust and enhances total shareholder value. Our analysis identifies an endogenous cost of corporate control, offers implications for the control premium, and provides a novel rationale for the separation of ownership and control. | - |
dc.language | eng | - |
dc.publisher | Wiley-Blackwell Publishing, Inc. The Journal's web site is located at http://www.wiley.com/bw/journal.asp?ref=0020-6598 | - |
dc.relation.ispartof | International Economic Review | - |
dc.rights | This is the peer reviewed version of the following article: International Economic Review, 2020, v. 61 n. 2, p. 901-939, which has been published in final form at https://doi.org/10.1111/iere.12444. This article may be used for non-commercial purposes in accordance with Wiley Terms and Conditions for Use of Self-Archived Versions. | - |
dc.subject | Corporate governance | - |
dc.subject | Boards | - |
dc.subject | Corporate boards | - |
dc.title | Negotiated Block Trade and Rebuilding of Trust | - |
dc.type | Article | - |
dc.identifier.email | Fong, Y-F: yukfaims@hku.hk | - |
dc.identifier.email | Li, J: jli1@hku.hk | - |
dc.identifier.authority | Fong, Y-F=rp02535 | - |
dc.identifier.authority | Li, J=rp02406 | - |
dc.description.nature | postprint | - |
dc.identifier.doi | 10.1111/iere.12444 | - |
dc.identifier.scopus | eid_2-s2.0-85083958930 | - |
dc.identifier.hkuros | 309932 | - |
dc.identifier.volume | 61 | - |
dc.identifier.issue | 2 | - |
dc.identifier.spage | 901 | - |
dc.identifier.epage | 939 | - |
dc.identifier.isi | WOS:000529268000001 | - |
dc.publisher.place | United States | - |
dc.identifier.issnl | 0020-6598 | - |