China has some unique institutional features. For example, the shares of listed firms are segmented into negotiable and nonnegotiable. The controlling shareholders, usually connected to the government, hold nonnegotiable shares. We examine how these institutional features affected cash dividend payments in China during the period 1994-2006. We find that, despite China’s unique institutional set...

We develop a model to illustrate that controlling shareholders choose the level of investor protection that maximizes their own interests. Controlling shareholders in companies with complicated control structures can easily extract private benefits and are thus reluctant to enhance investor protection which would necessitate increased transparency. In contrast, controlling shareholders in compa...

This paper investigates whether proximity to institutional shareholders influences corporate policies. We find that firms with high local institutional ownership are more profitable, less risky, and have a better governance structure. Specifically, these firms are less likely to engage in undesirable corporate activities such as aggressive earnings management or option back-dating and are there...

Economic analysis and evidence indicate the market for corporate control is benefiting shareholders, society, and the corporate form of organization. The value of transactions in this market ran at a record rate of about $180 billion per year in 1985 and 1986--47 percent above the 1984 record of $122 billion. The number of transactions with purchase prices exceeding one billion dollars was 27 o...

In this paper we show, in an incomplete contracts framework that combines asymmetric information and moral hazard, that by permitting insiders to trade on personal account the equilibrium level of output can be increased and shareholder welfare can be improved. There are two reasons for this. First, insider trading impounds information regarding the costs and benefits of effort and perk consump...

This paper analyzes the determinants of the differential pricing of equity classes (the so-called dual-class premium [DCP]) in Brazil from 1995 to 2006 with a focus on two specific corporate governance aspects: i) the granting of tag along rights, a mandatory bid rule that extends to minority shareholders the right to sell their shares in case of a control transfer; and ii) the identity of the ...

The appraisal right in terms of section 164 the Companies Act 71 2008 has been applicable to fundamental transactions undertaken by companies for a number years. first two aims this article are provide an overview right, and second revisit certain concerns that were raised about determination fair value courts where shareholder makes application court value. It is suggested should not present m...

As the nation confronts a growing tide of security breaches, the importance of having quality data breach information systems becomes paramount. Yet too little attention is paid to evaluating these systems. This article draws on data quality scholarship to develop a yardstick that assesses the quality of data breach notification systems in the U.S. at both the state and national levels from the...

In this article, we study the potential for digital, online information and electronic voting to improve shareholder surplus by facilitating a new governance structure, owner-governance, which shifts control of the takeover decision from the board to shareholders. We compare analytical models of owner-governance to the current practice of delegatedgovernance in the context of increasing availab...

Risk shifting is a well-known agency problem in corporate finance which also exists between policyholders and shareholders of insurance companies. Shareholders engage in excessive risk taking at the expense of policyholders who, in turn, are less willing to pay for insurance coverage. Solvency regulation addresses this incentive problem by restricting the set of investment strategies and premiu...