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Corporate Governance and Information Efficiency in Security Markets
Author(s) -
Cai Charlie X.,
Keasey Kevin,
Short Helen
Publication year - 2006
Publication title -
european financial management
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.311
H-Index - 64
eISSN - 1468-036X
pISSN - 1354-7798
DOI - 10.1111/j.1468-036x.2006.00276.x
Subject(s) - corporate governance , transparency (behavior) , accounting , business , affect (linguistics) , corporate security , stakeholder , project governance , public relations , finance , political science , sociology , law , communication
This paper investigates a neglected topic in corporate governance research; namely, do governance characteristics affect the market reaction to news? The topic is important given the emphasis by governance regulations and codes of best practice on the need for greater transparency of corporate activities. For the first time in the corporate governance literature, we show that corporate governance characteristics (particularly the presence of founding family directors and gender diverse boards) affect the market reaction to company specific news. The results of the paper point to the analysis of the impact of governance characteristics on the market reaction to news being a new and complementary research agenda within corporate governance.