skip to primary navigationskip to content
 

F&A seminar - “Making the Most of Good Times: Shareholder Rights and Performance Revisited” by Tara Bhandari, MIT Sloan School of Management

When Feb 21, 2013
from 11:00 AM to 12:30 PM
Where CJBS, W4.05
Contact Name
Add event to calendar vCal
iCal

“Making the Most of Good Times: Shareholder Rights and Performance Revisited”

Tara Bhandari, MIT Sloan School of Management

Abstract:

I demonstrate that the relationship between corporate governance and firm performance varies with industry performance cycles. Well-governed firms, as classified by the shareholder rights index of Gompers, Ishii and Metrick (2003), outperform only in good times. Specifically, positive abnormal stock returns to good governance are concentrated in periods of high industry returns, and are at least partially reversed during industry downturns. In terms of operating performance, well-governed firms outperform relative to poorly-governed firms in the same industry during highly profitable periods, but both groups have similar operating performance during weak industry conditions. This pattern of performance seems to be expected by investors, suggesting that the higher valuations of well-governed firms (as measured by Tobin’s Q) are due to higher expected productivity in good times. In turn, the more symmetric pattern of returns may reflect updating of valuations as expectations of such good operating outcomes change, providing an alternative to learning and static risk theories in explaining the apparent abnormal returns to governance and their disappearance after 2001.


« December 2019 »
December
MoTuWeThFrSaSu
1
2345678
9101112131415
16171819202122
23242526272829
3031

RSS Feed Latest news

Winners of the Best Student Paper Award 2018 announced

Aug 21, 2018

Cambridge Finance is proud to announce the winners of the Best student Paper Award for 2017-2018

View all news

Upcoming events

Cambridge Finance Workshop - Anne Villamil

Jan 23, 2020

Upper Hall, Peterhouse College, Cambridge CB2 1RD

Cambridge Finance Workshop - Alberto Manconi

Feb 06, 2020

Upper Hall, Peterhouse College, Cambridge CB2 1RD

Cambridge Finance Workshop - Ernst Maug

Feb 20, 2020

KH107, Keynes House, Cambridge Judge Business School

Previous events

Upcoming events