The effect of CEO ownership and shareholder rights on cost of equity capital

Corporate Governance

Volumn 9, Issue 3, 2009, Pages 255-270

  Huang, Henry ^a   Wang, Quanxi ^b   Zhang, Xiaonong ^b  

^a PRAIRIE VIEW A AND M UNIVERSITY   (United States)

^b NANKAI UNIVERSITY   (China)

Author keywords

Corporate ownership; Equity capital; Shareholders

Indexed keywords

EID: 69549095870     PISSN: 14720701     EISSN: None     Source Type: Journal    
DOI: 10.1108/14720700910964325     Document Type: Article

References (44)

1. Botosan, C. (1997), Disclosure level and the cost of equity capital, The Accounting Review, Vol. 72 No. 3, pp. 323-50.
2. Cheng, A., Huang, H. and Collins, D. (2005), Shareholder rights and the cost of equity capital, Working paper, Louisiana State University.
3. Cheng, A., Huang, H. and Collins, D. (2006), Shareholder rights, financial disclosure and the cost of equity capital, Review of Quantitative Finance and Accounting, Vol. 27 No. 2, pp. 175-204.
4. Cheng, S., Nagar, V. and Rajan, M. (2004), Identify control motives in managerial ownership: evidence from anti-takeover legislation, Review of Financial Studies, Vol. 18 No. 2, pp. 637-72.
5. Core, J., Holthausen, R. and Larker, D. (1999), Corporate governance, chief executive officer compensation, and firm performance, Journal of Financial Economics, Vol. 51 No. 3, pp. 371-406.
6. Cremers, M. and Nair, V. (2005), Governance mechanisms and equity prices, Journal of Finance, Vol. 60 No. 6, pp. 2859-94.
7. Daves, P. and Ehrhardt, M. (2007), Convertible securities, employee stock options and the cost of equity, Financial Review, Vol. 42 No. 2, pp. 267-88.
8. Denis, D. (2001), Twenty-five years of corporate governance research and counting, Review of Financial Economics, Vol. 10 No. 3, pp. 191-212.
9. Easton, P. (2004), PE ratios, PEG ratios, and estimating the implied expected rate of return on equity capital, Accounting Review, Vol. 79 No. 1, pp. 73-95.
10. Fama, E. and MacBeth, J. (1973), Risk, return, and equilibrium: empirical tests, Journal of Political Economy, Vol. 81 No. 3, pp. 607-36.
11. Faleye, O. (2007), Does one hat fit all? The case of corporate leadership structure, Journal of Management and Governance, Vol. 11 No. 3, pp. 239-59.
12. Finkelstein, S. and Mooney, A.C. (2003), Not the usual suspects: how to use board process to make boards better, Academy of Management Executive, Vol. 17 No. 2, pp. 101-13.
13. Francis, J., LaFond, R., Olsson, P. and Schipper, K. (2004), Costs of capital and earnings attributes, The Accounting Review, Vol. 79, pp. 967-1010.
14. Gebhardt, W., Lee, C. and Swaminatha, B. (2001), Toward an implied cost of capital, Journal of Accounting Research, Vol. 39 No. 1, pp. 135-76.
15. Gode, D. and Mohanram, P. (2003), Inferring the cost of capital using the Ohlson-Juettner model, Review of Accounting Studies, Vol. 8 No. 4, pp. 399-431.
16. Gompers, P., Ishii, J.L. and Metrick, A. (2003), Corporate governance and equity prices, Quarterly Journal of Economics, Vol. 118 No. 1, pp. 107-55.
17. Hail, L. and Leuz, C. (2006), International differences in cost of capital: do legal institutions and securities regulation matter?, Journal of Accounting and Economics, Vol. 44 No. 3, pp. 485-531.
18. Hemmer, T., Kim, O. and Verrecchia, R. (1999), Introduction convexity into optimal compensation contracts, Journal of Accounting and Economics, Vol. 28 No. 3, pp. 307-27.
19. Himmelberg, C., Hubbard, G. and Palia, D. (1999), Understanding the determinants of managerial ownership and the link between ownership and performance, Journal of Financial Economics, Vol. 53 No. 3, pp. 353-84.
20. Holderness, C. (2003), A survey of blockholders and corporate control, Economic Policy Review, Vol. 9 No. 1, pp. 51-64.
21. Ibottson, R. (1999), 1999 Yearbook, Ibbotson Associates, Chicago, IL.
22. Jensen, M. (1993), The modern industrial revolution, exit, and the failure of internal control systems, Journal of Finance, Vol. 48 No. 3, pp. 831-80.
23. Jensen, M. and Meckling, W. (1976), Theory of the firm: managerial behavior, agency costs and ownership structure, Journal of Financial Economics, Vol. 3 No. 4, pp. 305-60.
24. Jensen, M. and Murphy, K. (1990), Performance pay and top management incentives, Journal of Political Economy, Vol. 98 No. 2, pp. 225-64.
25. Khurana, I. and Raman, K. (2004), Litigation risk and the financial reporting credibility of Big 4 versus Non-Big 4 audits: evidence from Anglo-American countries, The Accounting Review, Vol. 79 No. 2, pp. 73-496.
26. McConnell, J. and Servaes, H. (1990), Additional evidence on equity ownership and corporate value, Journal of Financial Economics, Vol. 27 No. 2, pp. 595-612.
27. Morck, R., Shleifer, A. and Vishny, R. (1988), Management ownership and market valuation: an empirical analysis, Journal of financial economics, Vol. 20 Nos 1-2, pp. 293-315.
28. Murphy, K. (1985), Corporate performance and managerial remuneration: an empirical analysis, Journal of Accounting and Economics, Vol. 7 Nos 1-3, pp. 11-42.
29. Ohlson, J. and Juettner-Nauroth, B. (2005), Expected EPS and EPS growth as determinants of value, Review of Accounting Studies, Vol. 10 Nos 2-3, pp. 349-65.
30. Pinnell, M. (2000), State Takeover Laws, Investor Responsibility Research Center Inc., Washington, DC.
31. Rosenbaum, V.K. (1990), Corporate Takeover Defenses, Investor Responsibility Research Center Inc., Washington, DC.
32. Rosenbaum, V.K. (1993), Corporate Takeover Defenses, Investor Responsibility Research Center Inc., Washington, DC.
33. Rosenbaum, V.K. (1995), Corporate Takeover Defenses, Investor Responsibility Research Center Inc., Washington, DC.
34. Rosenbaum, V.K. (1998), Corporate Takeover Defenses, Investor Responsibility Research Center Inc., Washington, DC.
35. Rosenbaum, V.K. (2000), Corporate Takeover Defenses, Investor Responsibility Research Center Inc., Washington, DC.
36. Rosenbaum, V.K. (2002), Corporate Takeover Defenses, Investor Responsibility Research Center Inc., Washington, DC.
37. Securities and Exchange Commission (2003), Disclosure Regarding Nominating Committee Functions and Communications between Security Holders and Boards of Directors, SEC, Washington, DC.
38. Shleifer, A. and Vishny, R.W. (1997), A survey of corporate governance, The Journal of Finance, Vol. 52 No. 2, pp. 737-83.
39. Waling, R. and Long, M. (1984), Agency theory, managerial welfare, and takeover bid resistance, Rand Journal of Economics, Vol. 15 No. 1, pp. 54-68.
40. Wooldridge, J.M. (Ed.) (2002), Econometric Analysis of Cross Section and Panel Data, The MIT Press, Cambridge, MA.
41. US House of Representatives (2007), HR 1257: Shareholder Vote on Executive Compensation Act, US House of Representatives, Washington, DC.
42. Easton, P. and Monahan, S. (2005), An evaluation of accounting-based measures of expected returns, Accounting Review, Vol. 80 No. 2, pp. 501-38.
43. Hausman, J.A. (1978), Specification tests in econometrics, Econometrica, Vol. 46 No. 6, pp. 1251-71.
44. Warfield, T., Wild, J. and Wild, K.(1995),Managerial ownership, accounting choices, and informativeness of earnings, Journal of Accounting and Economics, Vol. 20 No. 1, pp. 61-91.