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Delistings and the costs of governance: a study of European stock exchanges 1996–2004

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  • Steen Thomsen

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  • Frederik Vinten

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Abstract

In recent years there has been a dramatic increase in delistings from stock exchanges in the US and Europe, and this trend has been partly attributed to increasing administrative costs in listed companies. Has corporate governance regulation gone too far? We examine delistings from European stock exchanges 1996–2004 and find that standard corporate governance regulation—like investor protection and corporate governance codes—is associated with more delistings and in particularly going private transactions. In contrast, the tendency to go private is found to be lower, when the quality of overall governance is high. The results continue to hold when we take into consideration that governance policy may be endogenous. Copyright Springer Science+Business Media New York 2014

Suggested Citation

  • Steen Thomsen & Frederik Vinten, 2014. "Delistings and the costs of governance: a study of European stock exchanges 1996–2004," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 18(3), pages 793-833, August.
  • Handle: RePEc:kap:jmgtgv:v:18:y:2014:i:3:p:793-833
    DOI: 10.1007/s10997-013-9256-7
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    1. Cirillo, Alessandro & Mussolino, Donata & Romano, Mauro & Viganò, Riccardo, 2017. "A complicated relationship: Family involvement in the top management team and post-IPO survival," Journal of Family Business Strategy, Elsevier, vol. 8(1), pages 42-56.
    2. repec:eee:fambus:v:8:y:2017:i:2:p:74-86 is not listed on IDEAS
    3. repec:eee:finana:v:58:y:2018:i:c:p:179-194 is not listed on IDEAS

    More about this item

    Keywords

    Delisting; Public listing; Transaction costs; Mergers; Acquisitions; Bankruptcy; Liquidation; Going private; Private equity; Investor protection; G14; G15; G18; G24; G32; G33; G34; G38; K20; K40;

    JEL classification:

    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets
    • G18 - Financial Economics - - General Financial Markets - - - Government Policy and Regulation
    • G24 - Financial Economics - - Financial Institutions and Services - - - Investment Banking; Venture Capital; Brokerage
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • G33 - Financial Economics - - Corporate Finance and Governance - - - Bankruptcy; Liquidation
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • G38 - Financial Economics - - Corporate Finance and Governance - - - Government Policy and Regulation
    • K20 - Law and Economics - - Regulation and Business Law - - - General
    • K40 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - General

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