We examine whether firms belonging to Korean business groups (chaebols) benefit from acquisitions they make or such provide a way for controlling shareholders increase their wealth by increasing the value of other group (tunneling). find that when chaebol‐affiliated firm makes an acquisition, its stock price on average falls. While minority making acquisition lose, shareholder benefits because enhances in group. This evidence is consistent with tunneling hypothesis.

Journal Article A New Approach to Measuring Financial Contagion Get access Kee-Hong Bae, Bae Korea University Search for other works by this author on: Oxford Academic Google Scholar G. Andrew Karolyi, Karolyi Ohio State Reneé M. Stulz and NBER Address correspondence Stulz, University, Fisher College of Business, 2100 Neil Ave. 806 Hall, Columbus, OH 43210, or e-mail: stulz@cob.osu.edu. The Review Studies, Volume 16, Issue 3, July 2003, Pages 717–763, https://doi.org/10.1093/rfs/hhg012...

ABSTRACT We examine whether differences in legal protection affect the size, maturity, and interest rate spread on loans to borrowers 48 countries. Results show that banks respond poor enforceability of contracts by reducing loan amounts, shortening maturities, increasing spreads. These effects are both statistically significant economically large. While stronger creditor rights reduce spreads, they do not seem matter for size maturity. Overall, we variation matters a great deal more how...

This paper investigates the relation between differences in accounting standards across countries and foreign analyst following forecast accuracy. We develop two measures of generally accepted principles (GAAP) for 1,176 country-pairs. then examine impact these on analysts. In so doing, we utilize a unique database that identifies location financial analysts around world, creating sample covers 6,888 making total 43,968 forecasts 6,169 firms from 49 during 1998–2004. find extent to which...

ABSTRACT We investigate the role of limit orders in liquidity provision a pure order‐driven market. Results show that market depth rises subsequent to an increase transitory volatility, and volatility declines depth. also examine how affects mix between orders. When arises from ask (bid) side, investors will submit more sell (buy) than This result is consistent with existence limit‐order traders who enter place when needed.

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Abstract We study the impact of board reforms implemented in 40 countries worldwide on corporate dividend policy. Using a difference-in-differences analysis, we find that firms pay higher dividends following reforms. The increase payouts is more pronounced for with weak governance pre-reform period and those strong external mechanisms. Our findings corroborate outcome model, which postulates strengthen monitoring role empower outside shareholders to force management disgorge dividends.

Abstract Using the pay restriction imposed on CEOs of centrally administered state‐owned enterprises (CSOEs) in China 2009, we study effects limiting CEO pay. Compared with firms not subject to restriction, CSOEs experienced a significant cut. In response cut, increased consumption perks and siphoned off firm resources for their own benefit. Pay‐performance sensitivity these also significantly decreases. The performance dropped following restriction. Our findings suggest that restricting...

This paper proposes a new approach to evaluate contagion in financial markets. Our measure of captures the co-incidence extreme return shocks across countries within region and regions that cannot be explained by linear propagation models shocks. We characterize extent contagion, its economic significance, determinants using multinomial logistic regression model. Applying our daily returns emerging markets during 1990s, we find when measured shocks, is predictable depends on regional...

Abstract: We investigate the quality of two primary accounting summary measures, i.e., earnings and book value, provided by firms belonging to Korean business groups (chaebols). find that value‐relevance value is significantly smaller for affiliated with groups. also cross‐equity ownership (a proxy agency problem between controlling minority shareholders) negatively affects value‐relevance, while foreign equity monitoring effect) positively value‐relevance. This evidence consistent view poor...

Abstract We examine two competing views regarding the impact of competition among credit rating agencies on quality: view that do not sacrifice their reputation by inflating firm ratings, and arising from conflict interest inherent in an “issuer pay” model creates pressure to inflate ratings. Using Fitch’s market share as a measure controlling for endogeneity problem caused unobservable industry effects, we find no relation between suggesting does lead inflation.