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Articles 1 - 12 of 12
Full-Text Articles in Finance and Financial Management
Are All Risks Created Equal? Rethinking The Distinction Between Legal And Business Risk In Corporate Law, Adi Libson, Gideon Parchomovsky
Are All Risks Created Equal? Rethinking The Distinction Between Legal And Business Risk In Corporate Law, Adi Libson, Gideon Parchomovsky
All Faculty Scholarship
Should corporate legal risk be treated similarly to corporate business risks? Currently, the law draws a clear-cut distinction between the two sources of risk, permitting the latter type of risk and banning the former. As a result, fiduciaries are shielded from personal liability in the case of business risk and are entirely exposed to civil and criminal liability that arises from legal risk-taking. As corporate law theorists have underscored, the differential treatment of business and legal risk is highly problematic from the perspective of firms and shareholders. To begin with, legal risk cannot be completely averted or eliminated. More importantly, …
Reversing The Fortunes Of Active Funds, Adi Libson, Gideon Parchomovsky
Reversing The Fortunes Of Active Funds, Adi Libson, Gideon Parchomovsky
All Faculty Scholarship
In 2019, for the first time in the history of U.S. capital markets, passive funds surpassed active funds in terms of total assets under management. The continuous growth of passive funds at the expense of active funds is a genuine cause for concern. Active funds monitor the management and partake of decision-making in their portfolio companies. Furthermore, they improve price efficiency and managerial performance by engaging in informed trading. The buy/sell decisions of active funds provide other market participants reliable information about the quality of firms. The cost of active investing is significant and it is exclusively borne by active …
Mapping The Knowledge Of Islamic Accounting Studies On Shariah Audit: A Bibliometric Analysis, Luqman Hakim Handoko, Sepky Mardian
Mapping The Knowledge Of Islamic Accounting Studies On Shariah Audit: A Bibliometric Analysis, Luqman Hakim Handoko, Sepky Mardian
Library Philosophy and Practice (e-journal)
The issues of shariah audit appeared more than three decades ago along with the progress of the Islamic financial industries. But it is challenging to obtain a study explaining the current state of shariah audit research to date. Therefore, it is necessary to assess the research on the Shariah audit. Thus, this study aimed to analyze and visualize the current state of shariah audit using a bibliometric approach. The bibliometric analysis was conducted by using VOSviewer software. To fulfill this goal, the keywords such as shariah audit, shariah auditing, and its variations were searched from the Scopus database. The articles …
Activist Investors: A Corporate Social Responsibility Perspective On Hedge Fund Activism And The Need For Focus On All Stakeholders, Lucy Marie Ankenbauer
Activist Investors: A Corporate Social Responsibility Perspective On Hedge Fund Activism And The Need For Focus On All Stakeholders, Lucy Marie Ankenbauer
Honors Theses
Corporate social responsibility (CSR) can result in distinctly different visions when instituted under the enlightened stakeholder theory or the shareholder maximization theory. The critical variation between these two theories is the principal party that businesses consider when instituting strategic decisions. Firms following the enlightened stakeholder theory will base decisions on all the various stakeholders of the company and develop policies which increase long-term firm value. Companies pursuing shareholder value maximization will consider all strategies through the eyes of the stockholders and how these individuals will be affected. Neither theory is more valid than the other, since many factors must be …
The Impact Of Csr On Corporate Financial Performance, David K. Ding
The Impact Of Csr On Corporate Financial Performance, David K. Ding
Research Collection Lee Kong Chian School Of Business
We provide one of the first analyses of corporate social responsibility (CSR) and firm performance using only annual financial reports. We document a link between corporate financial performance (CFP) and CSR, although this is not always positive. Specifically, we investigate whether CSR performance can be implied from financial reporting and provide evidence that CSR information implied by financial reports have a significant association with CFP. Furthermore, we provide the first comprehensive study of CSR reporting and link it with CFP in New Zealand.
Powerful Blockholders And Ceo Turnover, Chi Shen Wei, Lei Zhang
Powerful Blockholders And Ceo Turnover, Chi Shen Wei, Lei Zhang
Research Collection Lee Kong Chian School Of Business
We identify the power of institutional blockholders to influence management using previous occurrences of forced CEO turnover at other firms in the blockholders’ overall portfolio. We create a “powerful blockholder linkage” measure that strongly predicts future forced CEO turnover. These effects are larger when “powerful” blockholders are more motivated to monitor and when they have had valuable monitoring experience. Moreover, firms with powerful blockholders display higher CEO turnover-performance sensitivity, pursue more value-increasing mergers, and have higher firm value. Overall, our results suggest that an identifiable group of powerful blockholders play an important role in corporate governance.
Do Government Linked Companies Hold More Cash?, Chenxi Liu, Kian Leong Nelson Yap, Sili Zhou
Do Government Linked Companies Hold More Cash?, Chenxi Liu, Kian Leong Nelson Yap, Sili Zhou
Research Collection Yong Pung How School Of Law
In this paper, we investigate the cash holings of government linked corporations (GLCs) in Singapore, with different levels of Temasek Holdings ownership. We find evidence that Temasek owned public firms hold on average substantially more cash than otherwise similar public firms listed on SGX. This result is robust to different measures of Temasek ownership. We also show that when GLCs have excess cash, they do not spend it on capital expenditure, acquisition, dividends or share repurchase. Instead, they hoard these excess cash leading to an accumulation of cash. In addition, we show that Temasek firms are on average more profitable, …
Open Market Share Repurchase Programs And Corporate Governance: Company Performance, Gary Caton, Jeremy Goh, Yen Teik Lee, Scott C. Linn
Open Market Share Repurchase Programs And Corporate Governance: Company Performance, Gary Caton, Jeremy Goh, Yen Teik Lee, Scott C. Linn
Research Collection Lee Kong Chian School Of Business
Payout policies based on share repurchase programs provide greater flexibility than do those based on cash dividends. We develop and test an empirical model in which strongly-governed companies outperform weakly-governed companies after announcing share repurchase programs. Our findings include positive associations between strong governance and both post-announcement adjusted operating performance and abnormal stock returns. The results are robust to sample selection bias, different sample criteria, governance measurement, and various control variables. In addition, governance strength is associated with larger post-announcement changes in CEO incentive compensation and merger and acquisition activity, both of which we argue are consistent with strongly-governed companies …
Governance Matter: Morningstar Stewardship Grades And Mutual Fund Performance, Jerry X. Cao, Aurobindo Ghosh, Jeremy Goh, Wee Seng Ng
Governance Matter: Morningstar Stewardship Grades And Mutual Fund Performance, Jerry X. Cao, Aurobindo Ghosh, Jeremy Goh, Wee Seng Ng
Research Collection School Of Economics
Mutual fund investors have the arduous task of disentangling luck from ability of mutual fund managers’ performance. In this paper we investigate the role of mutual fund corporate governance (measured by Morningstar Stewardship grade) in mutual fund performance. We propose an objective data-driven corporate governance score based on principal components of Morningstar Stewardship Grades. Furthermore, we establish corporate governance scores have Granger Causality on long-term risk-adjusted returns. The findings suggest that corporate governance grades of mutual funds carry information content beyond the usual star rating measures for predicting long-term mutual fund performance and provide an effective tool for selecting funds.
Coporate Governance, Institutional Ownership, And The Decision To Pay The Amount Of Dividends: Evidence From Usa, John Obradovich, Amarjit Gill
Coporate Governance, Institutional Ownership, And The Decision To Pay The Amount Of Dividends: Evidence From Usa, John Obradovich, Amarjit Gill
Faculty Publications and Presentations
The decision to pay dividends is influenced by many financial factors. The purpose of this study is to find the relationships between corporate governance, institutional ownership, and the decision to pay dividends in American service firms. A sample of 296 American firms listed on New York Stock Exchange (NYSE) for a period of 3 years (from 2009-2011) was selected. This study applied a co-relational and non-experimental research design. The findings of this study indicate that the decision to pay dividends is a positive function of board size, CEO duality, and internationalization of the firm, and a negative function of institutional …
Grades Matter In Performance: Morningstar Stewardship Grades And Mutual Fund Performance, Aurobindo Ghosh, Jeremy Goh, Wee Seng Ng
Grades Matter In Performance: Morningstar Stewardship Grades And Mutual Fund Performance, Aurobindo Ghosh, Jeremy Goh, Wee Seng Ng
Research Collection Lee Kong Chian School Of Business
Investors in mutual funds have the unenviable task of disentangling two mutually confounding effects. First, to fathom the future performance of the funds based on current evidence, and second, to assess how well the mutual fund managers will steward their investments under uncertain economic conditions. We corroborate the dependence of weighted risk-adjusted returns (viz. the Star Ratings) on corporate governance score (viz. Stewardship Grade) accounting for fund specific characteristics. We document Stewardship scores Granger cause Star Rating. We propose an objective data-driven corporate governance score based on the components of Stewardship Grade. Both the static and dynamic fixed-effects models show …
Hype My Stock: Do Firms Really Want Biased Research?, Roger Loh
Hype My Stock: Do Firms Really Want Biased Research?, Roger Loh
Research Collection Lee Kong Chian School Of Business
Analyst research is alleged to be biased because of conflicts of interest when analysts’ employers underwrite securities for the firms covered. I posit that affiliated analyst optimism should be the strongest for offering firms with a desire to over-inflate stock prices. I hypothesize that a firm’s corporate governance and its CEO incentives are related to the affiliation bias. Using stock recommendations data, I find evidence that the affiliation bias is indeed more pervasive for firms with high CEO wealth sensitivity to stock price (i.e., high CEO delta). The larger affiliation bias for high delta firms remains even after the introduction …