NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

NBER Publications by Charles C.Y. Wang

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Working Papers and Chapters

June 2011Staggered Boards and the Wealth of Shareholders: Evidence from Two Natural Experiments
with Lucian A. Bebchuk, Alma Cohen: w17127
While staggered boards have been documented to be negatively correlated with firm valuation, such association might be due to staggered boards either bringing about lower firm value or merely reflecting the tendency of low-value firms to have staggered boards. In this paper, we use two natural experiments to shed light on the causality question. In particular, we focus on two recent court rulings, separated by several weeks, that affected in opposite directions the antitakeover force of staggered boards: (i) a ruling by the Delaware Chancery Court approving the legality of shareholder-adopted bylaws that weaken the antitakeover force of a staggered board by moving the company's annual meeting up from later parts of the calendar year to January, and (ii) the subsequent decision by the Delaw...
April 2010Learning and the Disappearing Association Between Governance and Returns
with Lucian A. Bebchuk, Alma Cohen: w15912
In an important and influential work, Gompers, Ishii, and Metrick (2003) show that a trading strategy based on an index of 24 governance provisions (G-Index) would have earned abnormal returns during the 1991-1999 period, and this intriguing finding has attracted much attention ever since it was reported. We show that the G-Index (as well as the E-Index based on a subset of the six provisions that matter the most) was no longer associated with abnormal returns during the period of 2000-2008, or any sub- periods within it, and we provide evidence consistent with the hypothesis that the disappearance of the governance-returns association was due to market participants' learning to appreciate the difference between firms scoring well and poorly on the governance indices. Consistent with the l...

Published: Learning and the Disappearing Association between Governance and Returns (with Alma Cohen and Charles C.Y. Wang) 108 Journal of Financial Economics 323-348 (2013).

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