We also show that firms focusing more
Only in special cases might the benefits to governments outweigh the risks and often unanticipated costs governments encounter. Publisher s linkvcc.columbia content fdi perspectives WORKING PAPERS Putting Skin in the Game Managerial Ownership and Bank Risk Taking By Bouwens Jan and Arnt Verriest ABSTRACT—This paper examines the relation between managerial ownership and bank risk exposure for a large sample of international financial institutions.We seek empirical evidence suggested by theories concerning conflicts between managers and owners over risk taking. We argue that managers holding equity of their bank take less risk because they have fewer opportunities to diversify risk compared with outside shareholders. Our findings are consistent with this idea. We document lower risk levels for banks that Chinese Overseas America Number Data employ bank managers with higher equity stakes. We also demonstrate that regulation hardly affects the risk taking of bank managers holding on their bank s shares. This contrasts with outside shareholders who are more likely to expose their bank to higher risk levels when regulation protects the bank against default. Managerial equity incentives may therefore serve as a risk reduction instrument. Download working paperhbs faculty Pages item.aspx num Short termism Investor Clientele and Corporate Performance By Brochet Francois Maria Loumioti and George Serafeim ABSTRAC.
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Using conference call transcripts to measure the time horizon that senior executives emphasize when they communicate with investors we develop a measure of corporate short termism. We find that the measure of short termism is associated with various proxies for earnings management suggesting that our proxy partially captures opportunistic behavior.n the short term have a more short term oriented investor base and fewer analysts issuing long term forecasts suggesting that corporate and capital market short termism are related. Moreover consistent with analytical models that emphasize the costly nature of short termism we find that short term oriented firms exhibit lower future accounting and stock market performance and a higher implied cost of capital.
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