Category: Shareholder Protection and Corporate Finance
Equity market reaction to events surrounding reforms in the minority shareholder protection
My 2012 thesis investigated the equity market reaction to events surrounding reforms in the quality and levels of minority shareholder protection, in particular country jurisdictions. The analysis was carried out using one minority shareholder legal protection reform that was enacted in Saudi Arabia and two reforms enacted in Tunisia from late 2007 until early 2009. ...
Empirical results of the relation between the minority shareholders protection and equity markets
My thesis examined empirically whether higher levels of legal protection for minority shareholders are associated with equity markets which were larger, more active, and faster in issuing new securities, that is to say equity market development. Using a sample of 16 MENA countries over the period between 2005-2009, panel data analyses as well as the ...
Investor Protection and Dividend Policy
LLSV (2000b) show that countries with strong shareholder rights are able to force firms to disgorge cash and pay higher dividends. They find that dividend policies vary across legal regimes in ways consistent with a particular version of the agency theory of dividends. Specifically, firms in common law countries, where investor protection is typically better, ...
Shareholder Protection and Corporate Value
Empirical analyses, such as that of Brockman and Chung (2003), Caprio et al., (2007), Claessens and Fan (2002), Johnson et al. (2000a) and La Porta et al. (2002) suggest that the legal protection of shareholders’ rights influences the valuation of firms. This is important for this thesis as the size of financial markets which is ...
Shareholders’ Protection and the Ownership Pattern
The image of the public corporation as a firm owned by dispersed shareholders, while control is concentrated in the hands of management, as suggested by Berle and Means (1932), has been shown to be the exception rather than the rule in most countries around the world (La Porta et al., 1999; Coffee, 2001). Different studies ...
Challenging Studies and Key Criticism fro ‘LLSV’ work
LLSV and supporting studies represent considerable evidence of a statistical association between measures of stock market development and the degree of protection available to non-controlling shareholders. However, these studies do not remain without criticism. Section (3.3.1) above offered a critique of the LLSV Anti-Director Index which has been used by the studies discussed here. For ...
Shareholders Protection and Stock Market Development
The work of the four financial economists ‘LLSV’ (1997 and 1998) along with subsequent studies (Demirguc-Kunt and Levine, 2001; Johnson et al., 2000a; Wurgler, 2000; and LLSV 1999; 2000 and 2002) demonstrate that better legal ‘investor protection’ is associated with increased breadth and depth of capital markets, a faster pace of new security issues, and ...
The Financial Markets Development and Economic Growth
The literature argues that financial markets are the fundamental channel through which most governments attempt to regulate their economies’ performance including combating inflation, promoting economic growth in the output of goods and services, and providing employment (Merton, 1990). It has been noted that the most successful economies have well developed financial markets (Levine and Zervos, ...