McDonough School of Business
Washington, DC 20057
NBER Working Papers and Publications
|March 2010||Differences in Governance Practices between U.S. and Foreign Firms: Measurement, Causes, and Consequences|
with Isil Erel, René Stulz, Rohan Williamson
in Corporate Governance, Michael Weisbach, editor
|August 2007||Differences in Governance Practices between U.S. and Foreign Firms: Measurement, Causes, and Consequences|
with Isil Erel, René Stulz, Rohan Williamson: w13288
Using an index which increases as a firm adopts more governance attributes, we find that 12.7% of foreign firms have a higher index than matching U.S. firms. The best predictor for whether a foreign firm adopts more governance attributes than a comparable U.S. firm is whether the firm comes from a common law country. We show that the value of foreign firms is negatively related to the difference between their governance index and the index of matching U.S. firms. This relation is robust to various approaches to control for the endogeneity of corporate governance and is consistent with the hypothesis that foreign firms are valued less because country characteristics make it suboptimal for them to invest as much in governance as comparable U.S. firms. Overall, our evidence suggests that firm...
Published: Reena Aggarwal & Isil Erel & René Stulz & Rohan Williamson, 2009.
"Differences in Governance Practices between U.S. and Foreign Firms: Measurement, Causes, and Consequences,"
Review of Financial Studies,
Oxford University Press for Society for Financial Studies, vol. 22(8), pages 3131-3169, August.
citation courtesy of
|January 2007||Do U.S. Firms Have the Best Corporate Governance? A Cross-Country Examination of the Relation between Corporate Governance and Shareholder Wealth|
with Isil Erel, Rene M. Stulz, Rohan Williamson: w12819
We compare the governance of foreign firms to the governance of similar U.S. firms. Using an index of firm governance attributes, we find that, on average, foreign firms have worse governance than matching U.S. firms. Roughly 8% of foreign firms have better governance than comparable U.S. firms. The majority of these firms are either in the U.K. or in Canada. When we define a firm's governance gap as the difference between the quality of its governance and the governance of a comparable U.S. firm, we find that the value of foreign firms increases with the governance gap. This result suggests that firms are rewarded by the markets for having better governance than their U.S. peers. It is therefore not the case that foreign firms are better off simply mimicking the governance of comparable U...
|July 2002||Institutional Allocation In Initial Public Offerings: Empirical Evidence|
with Nagpurnanand R. Prabhala, Manju Puri: w9070
We analyze institutional allocation in initial public offerings (IPOs) using a new dataset of US offerings between 1997 and 1998. We document a positive relationship between institutional allocation and day one IPO returns. This is partly explained by the practice of giving institutions more shares in IPOs with strong pre-market demand, consistent with book-building theories. However, institutional allocation also contains private information about first-day IPO returns not reflected in pre-market demand and other public information. Our evidence supports book-building theories of IPO underpricing, but suggests that institutional allocation in underpriced issues is in excess of that explained by book-building alone.
Published: Aggarwal, R., N.R. Prabhala, and Manju Puri. “Institutional allocation in initial public offerings: Empirical evidence." Journal of Finance 57, 3 (2002): 1421-1442.