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Shareholder Protection (shareholder + protection)

Distribution by Scientific Domains

Business, Economics, Finance and Accounting	80%

Selected Abstracts

Capital Investment and Earnings: International Evidence

CORPORATE GOVERNANCE, Issue 5 2009
Ahmet Can Inci
ABSTRACT Manuscript Type: Empirical Research Question/Issue: We examine the nature of the dynamic linkage (causality) between earnings and capital investment using firm-level data from around the world to see whether the legal environment, including corporate governance and monitoring mechanisms, and financial development are important in the profitability of capital investment. Research Findings/Insights: Using firms in 40 countries over the period 1988,2004, we find that the causality from earnings to capital investment is positive and strong in almost all countries, irrespective of the type of legal system and the degree of financial development. However, the causality from capital investment to earnings is generally negative for firms in civil law and financially undeveloped countries, while the causality is generally positive in common law and financially developed countries. Therefore, our international cross-country study enables us to find that the legal system and financial development are factors in the determination of the profitability of capital investment. Theoretical/Academic Implications: Our findings imply that internal financing is a significant constraint for capital investment, which provides support for the pecking order theory even for financially developed markets and for the free cash flow theory. Common law and financially developed countries tend to provide better shareholder protection with more efficient corporate governance and better investment decisions. Practitioner/Policy Implications: To encourage managers to make capital investments in value-increasing projects, it is important to further improve a legal environment that includes corporate governance, monitoring, and incentive mechanisms. Financial development that includes effective financial regulatory agencies should be sought. [source]

Global Markets and National Regulation: The Protection of Shareholder Interests in Germany and Italy

GOVERNMENT AND OPPOSITION, Issue 1 2007
Dermot McCann
Global market integration is widely perceived as presenting a major challenge to the sustainability of many national economic regulatory systems. There is far less agreement, however, about precisely how these pressures feed into the politics of reform and reshape national public policy. This article will seek to cast light on this relationship by identifying four influential ,models of linkage' between global pressures and regulatory change. It will then comparatively assess their capacity to elucidate the progress of shareholder protection reform in Germany and Italy. While no single model proves fully satisfactory, it will be argued that the weaknesses of two of them can be largely overcome through a process of refinement and integration. [source]

Investor Protection and International Investment Positions: An Empirical Analysis,

INTERNATIONAL FINANCE, Issue 2 2006
Teresa L. Cyrus
Given the recent revival of interest in the institutional determinants of global capital flows, we investigate the relationship between investor protection and international investment positions, using data on 40 countries for the period 1970,98. We find that strong shareholder protection is an important predictor of gross foreign direct investment liabilities, while countries with strong creditor protection tend to have positive stocks of net foreign assets. We conclude that the global pattern of investor protection is a significant determinant of international investment positions. [source]

Capital Market Regimes and Bank Structure in Europe

JOURNAL OF MONEY, CREDIT AND BANKING, Issue 6 2010
RONALD E. SHRIEVES
international banking; market integration; shareholder protection We hypothesize that fundamental features that distinguish European capital markets have predictably influenced emerging national differences in bank capitalization and loan growth. Using bank-level data from 13 European countries, 1998 to 2004, we find evidence of positive effects of "equity-friendly" market features on bank capitalization and positive effects of both "equity-friendly" and "credit-friendly" market features on loan growth. The findings are strongest in small banks and in banks with cooperative charters. Our results suggest that ongoing and prospective integration of European banking markets is mitigated by relatively static features of the equity and credit markets on which banks rely. [source]

When Financial Institutions Are Large Shareholders: The Role of Macro Corporate Governance Environments

THE JOURNAL OF FINANCE, Issue 6 2006
DONGHUI LI
ABSTRACT While financial institutions' aggregate investments have grown substantially worldwide, the size of their individual shareholdings, and ultimately their incentive to monitor, may be limited by the free-rider problem, regulations, and a preference for diversification and liquidity. We compare institutions' shareholding patterns across countries and find vast differences in the extent to which they are large shareholders. These variations are largely determined by macro corporate governance factors such as shareholder protection, law enforcement, and corporate disclosure requirements. This suggests that strong governance environments act to strengthen monitoring ability such that more institutions are encouraged to hold concentrated equity positions. [source]