The relationship between dividends and corporate governance in five East Asian countries over the period 1994-2003, comparing the outcome and substitute models, is investigated. Evidence of a pre-crisis negative relationship between dividends and governance indicates that dividends act as a substitute for other corporate governance mechanisms during this exuberant period. A strong positive relationship between governance and dividends emerges post-crisis, consistent with substantial improvements in governance empowering shareholders. The relationship is incremental to the effect of the legal regime, confirming that shareholder protection at the firm level is important to forcing firms to disgorge cash in an outcome model of dividends.corporate governance, financial crisis, dividends, emerging markets,

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This paper analyzes the relationship between earnings management and insider trading, specifically investigating whether discretionary accruals are related to insider trading and valuation. We find strong evidence of insiders managing earnings downward when buying and managing earnings upward when selling. On the marginal basis, value (high book-to-market value) firms manage their earnings upward compared to growth (low book-to-market value) firms, consistent with a signaling hypothesis. However, the opposite is true on the average basis, consistent with an opportunistic hypothesis. Copyright (c) 2008 The Authors Journal compilation (c) 2008 Blackwell Publishing Ltd.

This study investigates the influence of past performance on investors' choice of professionally managed investment fund and provides evidence of a link between recent performance and the movement of assets-under-management. The sensitivity of funds flow to recent performance is estimated using data for 124 Australian wholesale funds during the 1980-to-1995 period. The results provide unequivocal evidence of the influence of prior period performance (annual and three-year average) on the movement of assets-under-management. Tests are conducted using gross return and three methods of risk adjustment with index, group average, CAPM as benchmarks. The results provide little evidence of differences in investor response to various measures of performance.