The Quarterly Journal of Economics · 2003 · 5.9K citations · 44 references
ManagementBusiness EconomicsCorporate GovernanceCorporate FinanceFinancial EconomicsShareholder RightsCorporate Governance MechanismsCorporate Governance RegulationFirm ValueInvestor RightsOwnership StructureShareholder ProtectionCorporate ProfitsDeterminants Of Firm ValueEquity Structure AnalysisFirm Value EffectsGovernanceSales Growth Analysis
Shareholder rights vary across firms. Using the incidence of 24 governance rules, we construct a “Governance Index” to proxy for the level of shareholder rights at about 1500 large firms during the 1990s. An investment strategy that bought firms in the lowest decile of the index (strongest rights) and sold firms in the highest decile of the index (weakest rights) would have earned abnormal returns of 8.5 percent per year during the sample period. We find that firms with stronger shareholder rights had higher firm value, higher profits, higher sales growth, lower capital expenditures, and made fewer corporate acquisitions.
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Common risk factors in the returns on stocks and bonds
Eugene F. Fama, Kenneth R. French · Journal of Financial Economics · 1993 · 27.7K citations
Risk, Return, and Equilibrium: Empirical Tests
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Management ownership and market valuation
Andrei Shleifer, Robert W. Vishny · Journal of Financial Economics · 1988 · 7.1K citations · Full text