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Investability, Corporate Governance and Firm Value

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  • Thomas O'Connor

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    (Department of Economics Finance and Accounting, National University of Ireland, Maynooth)

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    Abstract

    In this paper, I show that “investable premia” are greatest for transparent, well-governed firms. I find that single-class share investable firms and better-governed firms reap the largest valuation gains from becoming investable. Dual-class share firms do gain from becoming investable, but their gains are much lower than that of single-class share firms. These findings suggest that the failure on the part of firms to remedy agency conflicts prior to becoming investable only serves to greatly reduce, or even nullify their “investable premia”.

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    Bibliographic Info

    Paper provided by Department of Economics, Finance and Accounting, National University of Ireland - Maynooth in its series Economics, Finance and Accounting Department Working Paper Series with number n223-12.pdf.

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    Length: 26 pages
    Date of creation: 2012
    Date of revision:
    Handle: RePEc:may:mayecw:n223-12.pdf

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    Keywords: Investability; Corporate Governance; Tobin’s q.;

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    Cited by:
    1. Thomas Flavin & Thomas O'Connor, 2013. "The effects of ownership structure on corporate financing decisions: Evidence from stock market liberalization," Economics, Finance and Accounting Department Working Paper Series n235-13.pdf, Department of Economics, Finance and Accounting, National University of Ireland - Maynooth.
    2. Thomas O'Connor & Stephen Kinsella & Vincent O’Sullivan, 2012. "Legal protection of investors, corporate governance, and investable premia in emerging markets," Economics, Finance and Accounting Department Working Paper Series n229-12.pdf, Department of Economics, Finance and Accounting, National University of Ireland - Maynooth.

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