Legal protection of investors, corporate governance, and the cost of equity capital

Journal of Corporate Finance

Volumn 15, Issue 3, 2009, Pages 273-289

  Chen, Kevin C W ^a   Chen, Zhihong ^b   Wei, K C John ^a  

^a HONG KONG UNIVERSITY OF SCIENCE AND TECHNOLOGY   (Hong Kong)

^b CITY UNIVERSITY OF HONG KONG   (Hong Kong)

Author keywords

Corporate governance; Cost of equity; Legal protection of investors

Indexed keywords

EID: 64649087278     PISSN: 09291199     EISSN: None     Source Type: Journal    
DOI: 10.1016/j.jcorpfin.2009.01.001     Document Type: Article

References (65)

1. Amihud Y., and Mendelson H. Asset pricing and the bid-ask spread. Journal of Financial Economics 17 (1986) 223-249
2. Amihud Y., and Mendelson H. Liquidity, the value of the firm, and corporate governance. Journal of Applied Corporate Finance 20 (2008) 32-45
3. Ashbaugh-Skaife H., Collins D.W., and LaFond R. Corporate governance, risk and cost of equity capital. Working paper (2006), University of Wisconsin at Madison
4. Attig N., Guedhami, and Mishra D. Multiple large shareholders, control contests, and implied cost of equity. Journal of Corporate Finance 14 (2008) 721-737
5. Bekaert G., and Harvey C. Foreign speculations and emerging equity markets. Journal of Finance 55 (2000) 565-613
6. Bhattacharya U., and Daouk H. The world price of insider trading. Journal of Finance 57 (2002) 75-108
7. Bennedsen M., and Wolfenzon D. The balance of power in closely held corporations. Journal of Financial Economics 58 (2000) 113-139
8. Botosan C., and Plumlee M. Assessing alternative proxies for the expected risk premium. Accounting Review 80 (2005) 21-53
9. Brooker M. Holy Grail still just out of reach. South China Morning Post (2001) (April 18, 2001)
10. Bushman R., and Smith A. Financial accounting information and corporate governance. Journal of Accounting and Economics 32 (2001) 237-333
11. Chen K.C.W., Chen Z.H., and Wei K.C.J. Agency costs of free cash flow and the effect of shareholder rights on the implied cost of equity capital. Working paper (2008), Hong Kong University of Science and Technology
12. Cheng C.S.A., Collins D., and Huang H.H. Shareholder rights, financial disclosure, and the cost of equity capital. Review of Quantitative Finance and Accounting 27 (2006) 175-204
13. Claus J., and Thomas J. Equity premia as low as three percent? Evidence from analysts' earnings forecasts for domestic and international stock markets. Journal of Finance 56 (2001) 1629-1666
14. Coombes P., and Watson M. Three surveys on corporate governance. McKinsey Quarterly 2000 4 (2000) Asia revalued
15. Core J.E., Guay W.R., and Rusticus T.O. Does weak governance cause weak stock returns? An examination of firm operating performance and investors' expectations. Journal of Finance 61 (2006) 655-687
16. Credit Lyonnais Securities Asia (CLSA). Saints & Sinners: Who's Got Religion? (2001)
17. Credit Lyonnais Securities Asia (CLSA). Make me Holy... But Not Yet! (2002)
18. Daouk H., Lee C.M.C., and Ng D. Capital market governance: How do security laws affect market performance?. Journal of Corporate Finance 12 (2006) 560-593
19. Demsetz H., and Lehn K. The structure of corporate ownership: causes and consequences. Journal of Political Economy 93 (1985) 1155-1177
20. Demsetz H., and Villalonga B. The ownership structure and corporate performance. Journal of Corporate Finance 7 (2001) 209-233
21. Denis D.J., and Kruse T.A. Managerial discipline and corporate restructuring following performance declines. Journal of Financial Economics 55 (2000) 391-424
22. Dimson E. Risk measurement when shares are subject to infrequent trading. Journal of Financial Economics 7 (1979) 197-226
23. Djankov S., La Porta R., Lopez-de-Silanes F., and Shleifer A. The law and economics of self-dealing. Journal of Financial Economics 88 (2008) 430-465
24. Doidge C., Karolyi G.A., and Stulz R.M. Why are countries so important for the corporate governance?. Working paper (2004), Ohio State University
25. Durnev A., and Kim E.H. To steal or not to steal: firm attributes, legal environment, and valuation. Journal of Finance 60 (2005) 1461-1493
26. Dyck I.J.A. Ownership structure, legal protections and corporate governance. In: Pleskovic B., and Stern N. (Eds). Annual World Bank Conference on Development Economics (2000)
27. Dyck A., and Zingales L. Private benefits of control: an international comparison. Journal of Finance 60 (2004) 537-600
28. Easley D., and O'Hara M. Information and the cost of capital. Journal of Finance 59 (2004) 1553-1583
29. Easton P. PE ratios, PEG ratios, and estimating the implied expected rate of return on equity capital. Accounting Review 79 (2004) 73-95
30. Easton P., and Monahan S. An evaluation of the accounting based measures of the cost of equity: a measurement error perspective. Accounting Review 80 (2005) 501-538
31. Elton E.J. Expected return, realized return, and asset pricing tests. Journal of Finance 54 (1999) 1199-1220
32. Fama E., and MacBeth J.D. Risk, return, and equilibrium: empirical tests. Journal of Political Economy 81 (1973) 607-636
33. Fama E., and French K. The cross-section of expected stock returns. Journal of Finance 47 (1992) 427-465
34. Fama E., and French K. Industry costs of equity. Journal of Financial Economics 43 (1997) 153-193
35. Gebhardt W.R., Lee C.M.C., and Swaminathan B. Toward an implied cost of capital. Journal of Accounting Research 39 (2001) 135-176
36. Gode D., and Mohanram P. Inferring cost of capital using the Ohlson-Juettner model. Review of Accounting Studies 8 (2003) 399-431
37. Gompers P.A., Ishii J.L., and Metrick A. Corporate governance and equity prices. Quarterly Journal of Economics 118 (2003) 107-155
38. Guay, W., Kothari, S.P., Shu, S., 2003. Properties of implied cost of capital using analysts' forecasts. Working paper, Wharton School, MIT, and Boston College.
39. Hail L., and Leuz C. International differences in the cost of equity capital: do legal institutions and securities regulation matter?. Journal of Accounting Research 44 (2006) 485-531
40. Hail L., and Leuz C. Cost of equity effects and changes in growth expectations around U.S. cross-listings. Working paper (2006)
41. Harvey C. Predictable risk and returns in emerging markets. Review of Financial Studies 8 (1995) 773-816
42. Hung M., and Trezevant R. Insider trading and corporate governance structure: evidence from Southeast Asia. Working paper (2003), University of Southern California
43. Jensen M.C., and Meckling W.H. Theory of the firm: managerial behavior, agency costs and ownership structure. Journal of Financial Economics 3 (1976) 305-360
44. Johnson S., Boone P., Breach A., and Friedman E. Corporate governance in the Asian financial crisis. Journal of Financial Economics 58 (2000) 141-186
45. Khanna T., Kogan J., and Palepu K. Globalization and corporate governance convergence? A cross-country analysis. Working paper (2002), Harvard Business School
46. Khanna T., Palepu K., and Srinivasan S. Disclosure practices of foreign companies interacting with U.S. Markets. Journal of Accounting Research 42 (2004) 475-508
47. Kvint V. Define emerging markets now. Forbes, January 29 (2008) 2008
48. Klapper L.F., and Love I. Corporate Governance, Investor Protection, and Performance in Emerging Markets. World Bank Policy Research Working Paper vol. 2818 (2002)
49. La Porta R., Lopez, -de-Silanes F., and Shleifer A. What works in securities laws?. Journal of Finance 61 (2006) 1-32
50. La Porta R., Lopez-de-Silanes F., Shleifer A., and Vishny R. Legal determinants of external finance. Journal of Finance 52 (1997) 1131-1150
51. La Porta R., Lopez-de-Silanes F., Shleifer A., and Vishny R. Law and finance. Journal of Political Economy 106 (1998) 1113-1155
52. La Porta R., Lopez-de-Silanes F., Shleifer A., and Vishny R. Investor protection and corporate governance. Journal of Financial Economics 58 (2000) 3-27
53. La Porta R., Lopez-de-Silanes F., Shleifer A., and Vishny R. Investor protection and corporate valuation. Journal of Finance 57 (2002) 1147-1170
54. Lee, M.C., Ng, D., Swaminathan, B., 2008. International asset pricing: Evidence from the cross section of implied cost of capital. Journal of Financial and Quantitative Analysis, forthcoming.
55. Lesmond D.A. Liquidity of emerging markets. Journal of Financial Economics 77 (2005) 411-452
56. Lesmond D., Ogden J., and Trzcinka C. A new estimate of transaction costs. Review of Financial Studies 12 (1999) 1113-1141
57. Levine R., and Zervos D. What we have learned about policy and growth from cross-country regressions?. American Economic Review Papers and Proceedings 83 (1993) 426-430
58. Lombardo D., and Pagano M. Law and equity markets: a simple model. In: McCahery J.A. (Ed). Corporate Governance Regimes: Convergence and Diversity (2002), Oxford University Press, London
59. Mikkelson W.H., and Partch M.M. The decline of takeovers and disciplinary managerial turnover. Journal of Financial Economics 44 (1997) 205-228
60. Mitton T. A cross-firm analysis of the impact of corporate governance on the East Asian financial crisis. Journal of Financial Economics 64 (2002) 215-241
61. Ohlson J.A., and Juettner-Nauroth B.E. Expected EPS and EPS growth as determinants of value. Review of Accounting Studies 10 (2005) 349-365
62. Pagano M., and Volpin P.F. The political economy of corporate governance. American Economic Review 96 (2005) 1005-1030
63. Pástor L., Sinha M., and Swaminathan B. Estimating the intertemporal risk-return tradeoff using the implied cost of capital. Journal of Finance 63 (2008) 2859-2897
64. Stulz R.M. Globalization, corporate finance, and the cost of capital. Journal of Applied Corporate Finance 12 (1999) 8-25
65. Stulz R.M., and Williamson R. Culture, openness, and finance. Journal of Financial Economics 70 (2003) 313-349