The purpose of this paper is to investigate the relationship between investor protection, ownership structure and corporate valuation. La Porta showed that there existed a simple linear relationship between corporate ...The purpose of this paper is to investigate the relationship between investor protection, ownership structure and corporate valuation. La Porta showed that there existed a simple linear relationship between corporate valuation and the holding percentage of controlling shareholders. But recent empirical evidence does not support it. A nonlinear relationship is proved between ownership structure and corporate valuaton by relaxing the assumption of La Porta＇s model in this paper. There exists a positive relation between investor protection and corporate valuation. Our empirical research shows that this relation is significantly positive indeed.展开更多
China＇s securities markets have been experiencing high growth this year. The Shanghai Stock Exchange is now ranked as the fourth largest stock exchange of the world. So, who is protecting the Chinese investors in thi...China＇s securities markets have been experiencing high growth this year. The Shanghai Stock Exchange is now ranked as the fourth largest stock exchange of the world. So, who is protecting the Chinese investors in this fast growing and potentially volatile market？ The Incomplete Law Theory of Pistor and XU contends that regulators, as they are more efficient, play a more dominate role than the judiciary in protecting investors in the securities markets. This theory to some extent explains why the China＇s judiciary has been inactive in protecting investors in China, the host of the third largest securities market in the world. However, this article finds that the theory is not able to adequately explain the investor protection mechanism in China. We find that by deploying various political resources, the Chinese state plays a direct role in protecting the interest of investors that is often more significant than that played by judicial or regulatory authority action.展开更多
We investigate whether foreign institutional investors facilitate firm-specific information flow in the global market. Specifically, using annual institutional ownership data from firms across 40 countries, we find th...We investigate whether foreign institutional investors facilitate firm-specific information flow in the global market. Specifically, using annual institutional ownership data from firms across 40 countries, we find that foreign institutional ownership is negatively associated with excess stock return comovement. Our results are more pronounced when foreign institutional investors originate from common-law countries and hold a large equity stake in invested firms; and when the invested firms are located in civil-law countries. Overall, the evidence suggests that foreign institutional investors from countries with strong investor protection play an important informational role in mitigating excess stock return comovement around the world.展开更多
文摘The purpose of this paper is to investigate the relationship between investor protection, ownership structure and corporate valuation. La Porta showed that there existed a simple linear relationship between corporate valuation and the holding percentage of controlling shareholders. But recent empirical evidence does not support it. A nonlinear relationship is proved between ownership structure and corporate valuaton by relaxing the assumption of La Porta＇s model in this paper. There exists a positive relation between investor protection and corporate valuation. Our empirical research shows that this relation is significantly positive indeed.
文摘China＇s securities markets have been experiencing high growth this year. The Shanghai Stock Exchange is now ranked as the fourth largest stock exchange of the world. So, who is protecting the Chinese investors in this fast growing and potentially volatile market？ The Incomplete Law Theory of Pistor and XU contends that regulators, as they are more efficient, play a more dominate role than the judiciary in protecting investors in the securities markets. This theory to some extent explains why the China＇s judiciary has been inactive in protecting investors in China, the host of the third largest securities market in the world. However, this article finds that the theory is not able to adequately explain the investor protection mechanism in China. We find that by deploying various political resources, the Chinese state plays a direct role in protecting the interest of investors that is often more significant than that played by judicial or regulatory authority action.
文摘We investigate whether foreign institutional investors facilitate firm-specific information flow in the global market. Specifically, using annual institutional ownership data from firms across 40 countries, we find that foreign institutional ownership is negatively associated with excess stock return comovement. Our results are more pronounced when foreign institutional investors originate from common-law countries and hold a large equity stake in invested firms; and when the invested firms are located in civil-law countries. Overall, the evidence suggests that foreign institutional investors from countries with strong investor protection play an important informational role in mitigating excess stock return comovement around the world.
