Corporate Governance and Firm Valuations: Evidence from Hong Kong
Do corporate governance standards affect firm value? Are shareholders in emerging markets willing to pay a premium for higher governance standards? We construct a corporate governance index to represent Hong Kong corporate governance standards and rank listed companies according to the index. Our model has 17 variables covering five governance mechanisms: board structure, executive compensation, ownership structure, executives’ conflict of interest, and transparency standards. We compare and analyze the special characteristics of H Shares, Red Chips, and family controlled companies among listed companies. Our results indicate that these areas significantly impact firm value, and Hong Kong investors are willing to pay substantial premium for better governance standards. We find that firms with better rating in our CG model have higher firm value, which implies that firms can increase their valuations by restructuring their corporate governance standards according to our model.
Corporate governance market for corporate control ownership market valuation
Adrian C.H. Lei Frank M. Song
School of Economics and Finance, the University of Hong Kong, Pokfulam Road, Hong Kong Faculty of Business and Economics The University of Hong Kong
国际会议
西安
英文
1-54
2006-07-17（万方平台首次上网日期，不代表论文的发表时间）