Local Investors and Corporate Governance

Chhaochharia, Vidhi ; Kumar, Alok ; Niessen-Ruenzi, Alexandra

DOI: https://doi.org/10.1016/j.jacceco.2012.03.002
URL: http://www.sciencedirect.com/science/article/pii/S...
Additional URL: http://papers.ssrn.com/sol3/papers.cfm?abstract_id...
Document Type: Article
Year of publication: 2012
The title of a journal, publication series: Journal of Accounting & Economics
Volume: 54
Issue number: 1
Page range: 42-67
Place of publication: Amsterdam [u.a.]
Publishing house: Elsevier
ISSN: 0165-4101
Publication language: English
Institution: Business School > Banken u. Finanzierung (Juniorprofessur) (Niessen-Ruezi 2009-2012)
Subject: 330 Economics
Abstract: This paper shows that local institutional investors are effective monitors of corporate behavior. Firms with high local ownership have better internal governance and are more profitable. These firms are also less likely to manage their earnings aggressively or backdate options and are less likely to be targets of class action lawsuits. Further, managers of such firms exhibit a lower propensity to engage in “empire building” and are less likely to “lead the quiet life”. Examining the local monitoring mechanisms, we find that local institutions are more likely to introduce shareholder proposals, increase CEO turnover, and reduce excess CEO pay.

Dieser Eintrag ist Teil der Universitätsbibliographie.

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