Empirical Evidence on Corporate Governance in Europe. The Effect on Stock Returns, Firm Value and Performance

Abstract

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Falling Between the Cracks: privatisation and corporate governance in the European telecom industry

“…These are firms that are most trustworthy because they are willing to make themselves more vulnerable to the discipline of the market for corporate control. Similar results have recently emerged in studies of European corporations, looking at a broader set of governance criteria (Bauer et al , 2003) There is value in the board being competent enough to contribute to strategic planning and show a high level of loyalty (including confidentiality), so that management may put its trust to it -and supply the board with sufficient information so that it can, in turn, play its strategic leadership role: a virtuous circle. There is value in employee motivation, as workers (especially "knowledge" workers) place greater trust in company leadership that has a clear sense of mission and avails the company with a robust set of values that apply throughout the organisation (Drucker, 1999).…”

Geographically dispersed ownership and inter-market stock price arbitrage—Ahold's crisis of corporate governance and its implications for global standards

“…The Ahold story is consistent with those that argue there is a relationship between corporate governance and market value (Gompers et al, 2003;Bauer et al, 2004). We link this issue to the debate about convergence of national standards of corporate governance.…”

Characterizing the corporate governance of UK listed construction companies

“…To redress the problem of corporate misconduct, ensuring sound corporate governance is believed to be essential to maintaining investor confidence and good performance. A growing number of empirical studies have demonstrated that good corporate governance contributes to better investor protection (la Porta et al, 2000), lower costs of capital (Ashbaugh-Skaife et al, 2004), reduced earnings manipulations (Xie et al, 2001), increased company market value (Black et al, 2004;Brown and Caylor, 2004), improved stock returns (Gompers et al, 2003;Bauer et al, 2003) and even economic growth (Maher and Andersson, 1999). In the UK, since the early 1990s, the problems concerning corporate governance have been addressed in a series of government reviews, beginning with the Cadbury Report (Cadbury, 1992), and then following with the Greenbury Report (Greenbury, 1995), the Hampel Report (Hampel, 1998), and finally the Combined Code (The Combined Code, 2003) (henceforth The Code).…”