ari prasetyo | I Bii (original) (raw)
Papers by ari prasetyo
Journal of Corporate Finance, Jan 1, 2004
Recent research studying the link between law and evidence showing that firm-level corporate gove... more Recent research studying the link between law and evidence showing that firm-level corporate governance finance has concentrated on country-level investor provisions matter more in countries with weak legal protection measures and focused on differences in legal environments. These results suggest that firms can systems across countries and legal families. Klapper and partially compensate for ineffective laws and Love extend this literature and provide a study of firm-enforcement by establishing good corporate governance level corporate governance practices across emerging and providing credible investor protection. The authors' markets and a greater understanding of the environments tests also show that firm-level governance and under which corporate governance matters more. Their performance is lower in countries with weak legal empirical tests show that better corporate governance is environments, suggesting that improving the legal system highly correlated with better operating performance and should remain a priority for policymakers.
Journal of Corporate Finance, Jan 1, 2004
Recent research studying the link between law and evidence showing that firm-level corporate gove... more Recent research studying the link between law and evidence showing that firm-level corporate governance finance has concentrated on country-level investor provisions matter more in countries with weak legal protection measures and focused on differences in legal environments. These results suggest that firms can systems across countries and legal families. Klapper and partially compensate for ineffective laws and Love extend this literature and provide a study of firm-enforcement by establishing good corporate governance level corporate governance practices across emerging and providing credible investor protection. The authors' markets and a greater understanding of the environments tests also show that firm-level governance and under which corporate governance matters more. Their performance is lower in countries with weak legal empirical tests show that better corporate governance is environments, suggesting that improving the legal system highly correlated with better operating performance and should remain a priority for policymakers.
Journal of Multinational Financial Management, Jan 1, 2007
The aim of this paper is to empirically examine the influence of corporate governance mechanisms,... more The aim of this paper is to empirically examine the influence of corporate governance mechanisms, that is, ownership and board structure of companies, on the level of CEO compensation for a sample of 414 large UK companies for the fiscal year 2003/2004. The results show that measures of board and ownership structures explain a significant amount of cross-sectional variation in the total CEO compensation, which is the sum of cash and equity-based compensation, after controlling other firm-specific variables. We find that firms with larger board size and a higher proportion of non-executive directors on their boards pay their CEOs higher compensation, suggesting that non-executive directors are not more efficient in monitoring than executive directors. We also find that institutional ownership and block-holder ownership have a significant and negative impact on the CEO compensation, which shows the existence of active monitoring by block-holders and institutional shareholders. Finally, the results show that CEO compensation is lower when the directors' ownership is higher.
Journal of Financial Research, Jan 1, 2007
We show how capital structure is influenced by the strength of shareholder rights.
Journal of Banking & Finance, Jan 1, 1998
This paper surveys the empirical and theoretical literature on the mechanisms of corporate govern... more This paper surveys the empirical and theoretical literature on the mechanisms of corporate governance. We focus on the internal mechanisms of corporate governance (e.g., corporate board of directors) and their role in ameliorating various classes of agency problems arising from con¯icts of interests between managers and equityholders, equityholders and creditors, and capital contributors and other stakeholders to the corporate ®rm. We also examine the substitution eect between internal mechanisms of corporate governance and external mechanisms, particularly markets for corporate control. Directions for future research are provided. Ó 1998 Elsevier Science B.V. All rights reserved. JEL classi®cation: G30; G32
China economic review, Jan 1, 1999
The Czech Republic's mass-privatization scheme changed the governance of... more The Czech Republic's mass-privatization scheme changed the governance of many firms in a short period of time. We show that it was effective in improving firms' management because of the concentrated ownership structure which resulted. For a cross-section of 706 firms over ...
Journal of Law, Economics, and …, Jan 1, 2006
We report strong OLS and instrumental variable evidence that an overall corporate governance inde... more We report strong OLS and instrumental variable evidence that an overall corporate governance index is an important and likely causal factor in explaining the market value of Korean public companies. We construct a corporate governance index (KCGI, 0;100) for 515 Korean companies based on a 2001 Korea Stock Exchange survey. In OLS, a worst-to-best change in KCGI predicts a 0.47 increase in Tobin's q (about a 160% increase in share price). This effect is statistically strong (t ¼ 6.12) and robust to choice of market value variable (Tobin's q, market/book, and market/sales), specification of the governance *Hayden W. 366 JLEO, V22 N2 index, and inclusion of extensive control variables. We rely on unique features of Korean legal rules to construct an instrument for KCGI. Good instruments are not available in other comparable studies. Two-stage and three-stage least squares coefficients are larger than OLS coefficients and are highly significant. Thus, this article offers evidence consistent with a causal relationship between an overall governance index and higher share prices in emerging markets. We also find that Korean firms with 50% outside directors have 0.13 higher Tobin's q (roughly 40% higher share price), after controlling for the rest of KCGI. This effect, too, is likely causal. Thus, we report the first evidence consistent with greater board independence causally predicting higher share prices in emerging markets. 46/463 0.089 90%
Journal of Comparative Economics, Jan 1, 2004
This paper studies the relationship between the governance mechanisms and the market valuation of... more This paper studies the relationship between the governance mechanisms and the market valuation of publicly listed firms in China empirically. We construct measures for corporate governance mechanisms and measures of market valuation for all publicly listed firms on the two stock markets in China by using data from the firm's annual reports. We then investigate how the market-valuation variables are affected by the corporate governance variables while controlling for a number of factors commonly considered in market valuation analysis. A corporate governance index is also constructed to summarize the information contained in the corporate governance variables. The index is found to have statistically and economically significant effect on market valuation. The analysis indicates that investors pay a significant premium for well-governed firms in China, benefiting firms that improve their governance mechanisms.
Emerging Markets Review, Jan 1, 2006
There is increasing evidence that broad measures of firm-level corporate governance predict highe... more There is increasing evidence that broad measures of firm-level corporate governance predict higher share prices. However, almost all prior work relies on cross-sectional data. This work leaves open the possibility that endogeneity or omitted firm-level variables explain the observed correlations. We address the second possibility by offering time-series evidence from Russia for 1999-present, exploiting a number of available governance indices. We find an economically important and statistically strong correlation between governance and market value in OLS with firm clusters and in firm random effects and firm fixed effects regressions. We also find significant differences in the predictive power of different indices, and in the components of these indices. How one measures governance matters. + We thank the World Bank for financial support. We thank [to come] and workshop and conference participants at [to come] for comments on earlier drafts. We also thank Edward Al-Hussainy and Rei Odawara for excellent research assistance.
Review of Financial Economics, Jan 1, 2003
In this study, we examine how corporate governance structure affects market valuation of capital ... more In this study, we examine how corporate governance structure affects market valuation of capital and R&D investments. We employ three empirical proxies of corporate governance-analyst following, board composition, and institutional holdings, and study whether market valuation of corporate investments varies with governance structure. Our results show that the market valuation of the firm's capital and R&D investments depends critically on analyst following and board composition, but not on institutional holdings. D
Journal of Financial Economics, Jan 1, 1989
Journal of Corporate Finance, Jan 1, 2004
Recent research studying the link between law and evidence showing that firm-level corporate gove... more Recent research studying the link between law and evidence showing that firm-level corporate governance finance has concentrated on country-level investor provisions matter more in countries with weak legal protection measures and focused on differences in legal environments. These results suggest that firms can systems across countries and legal families. Klapper and partially compensate for ineffective laws and Love extend this literature and provide a study of firm-enforcement by establishing good corporate governance level corporate governance practices across emerging and providing credible investor protection. The authors' markets and a greater understanding of the environments tests also show that firm-level governance and under which corporate governance matters more. Their performance is lower in countries with weak legal empirical tests show that better corporate governance is environments, suggesting that improving the legal system highly correlated with better operating performance and should remain a priority for policymakers.
Journal of Corporate Finance, Jan 1, 2004
Recent research studying the link between law and evidence showing that firm-level corporate gove... more Recent research studying the link between law and evidence showing that firm-level corporate governance finance has concentrated on country-level investor provisions matter more in countries with weak legal protection measures and focused on differences in legal environments. These results suggest that firms can systems across countries and legal families. Klapper and partially compensate for ineffective laws and Love extend this literature and provide a study of firm-enforcement by establishing good corporate governance level corporate governance practices across emerging and providing credible investor protection. The authors' markets and a greater understanding of the environments tests also show that firm-level governance and under which corporate governance matters more. Their performance is lower in countries with weak legal empirical tests show that better corporate governance is environments, suggesting that improving the legal system highly correlated with better operating performance and should remain a priority for policymakers.
Journal of Multinational Financial Management, Jan 1, 2007
The aim of this paper is to empirically examine the influence of corporate governance mechanisms,... more The aim of this paper is to empirically examine the influence of corporate governance mechanisms, that is, ownership and board structure of companies, on the level of CEO compensation for a sample of 414 large UK companies for the fiscal year 2003/2004. The results show that measures of board and ownership structures explain a significant amount of cross-sectional variation in the total CEO compensation, which is the sum of cash and equity-based compensation, after controlling other firm-specific variables. We find that firms with larger board size and a higher proportion of non-executive directors on their boards pay their CEOs higher compensation, suggesting that non-executive directors are not more efficient in monitoring than executive directors. We also find that institutional ownership and block-holder ownership have a significant and negative impact on the CEO compensation, which shows the existence of active monitoring by block-holders and institutional shareholders. Finally, the results show that CEO compensation is lower when the directors' ownership is higher.
Journal of Financial Research, Jan 1, 2007
We show how capital structure is influenced by the strength of shareholder rights.
Journal of Banking & Finance, Jan 1, 1998
This paper surveys the empirical and theoretical literature on the mechanisms of corporate govern... more This paper surveys the empirical and theoretical literature on the mechanisms of corporate governance. We focus on the internal mechanisms of corporate governance (e.g., corporate board of directors) and their role in ameliorating various classes of agency problems arising from con¯icts of interests between managers and equityholders, equityholders and creditors, and capital contributors and other stakeholders to the corporate ®rm. We also examine the substitution eect between internal mechanisms of corporate governance and external mechanisms, particularly markets for corporate control. Directions for future research are provided. Ó 1998 Elsevier Science B.V. All rights reserved. JEL classi®cation: G30; G32
China economic review, Jan 1, 1999
The Czech Republic's mass-privatization scheme changed the governance of... more The Czech Republic's mass-privatization scheme changed the governance of many firms in a short period of time. We show that it was effective in improving firms' management because of the concentrated ownership structure which resulted. For a cross-section of 706 firms over ...
Journal of Law, Economics, and …, Jan 1, 2006
We report strong OLS and instrumental variable evidence that an overall corporate governance inde... more We report strong OLS and instrumental variable evidence that an overall corporate governance index is an important and likely causal factor in explaining the market value of Korean public companies. We construct a corporate governance index (KCGI, 0;100) for 515 Korean companies based on a 2001 Korea Stock Exchange survey. In OLS, a worst-to-best change in KCGI predicts a 0.47 increase in Tobin's q (about a 160% increase in share price). This effect is statistically strong (t ¼ 6.12) and robust to choice of market value variable (Tobin's q, market/book, and market/sales), specification of the governance *Hayden W. 366 JLEO, V22 N2 index, and inclusion of extensive control variables. We rely on unique features of Korean legal rules to construct an instrument for KCGI. Good instruments are not available in other comparable studies. Two-stage and three-stage least squares coefficients are larger than OLS coefficients and are highly significant. Thus, this article offers evidence consistent with a causal relationship between an overall governance index and higher share prices in emerging markets. We also find that Korean firms with 50% outside directors have 0.13 higher Tobin's q (roughly 40% higher share price), after controlling for the rest of KCGI. This effect, too, is likely causal. Thus, we report the first evidence consistent with greater board independence causally predicting higher share prices in emerging markets. 46/463 0.089 90%
Journal of Comparative Economics, Jan 1, 2004
This paper studies the relationship between the governance mechanisms and the market valuation of... more This paper studies the relationship between the governance mechanisms and the market valuation of publicly listed firms in China empirically. We construct measures for corporate governance mechanisms and measures of market valuation for all publicly listed firms on the two stock markets in China by using data from the firm's annual reports. We then investigate how the market-valuation variables are affected by the corporate governance variables while controlling for a number of factors commonly considered in market valuation analysis. A corporate governance index is also constructed to summarize the information contained in the corporate governance variables. The index is found to have statistically and economically significant effect on market valuation. The analysis indicates that investors pay a significant premium for well-governed firms in China, benefiting firms that improve their governance mechanisms.
Emerging Markets Review, Jan 1, 2006
There is increasing evidence that broad measures of firm-level corporate governance predict highe... more There is increasing evidence that broad measures of firm-level corporate governance predict higher share prices. However, almost all prior work relies on cross-sectional data. This work leaves open the possibility that endogeneity or omitted firm-level variables explain the observed correlations. We address the second possibility by offering time-series evidence from Russia for 1999-present, exploiting a number of available governance indices. We find an economically important and statistically strong correlation between governance and market value in OLS with firm clusters and in firm random effects and firm fixed effects regressions. We also find significant differences in the predictive power of different indices, and in the components of these indices. How one measures governance matters. + We thank the World Bank for financial support. We thank [to come] and workshop and conference participants at [to come] for comments on earlier drafts. We also thank Edward Al-Hussainy and Rei Odawara for excellent research assistance.
Review of Financial Economics, Jan 1, 2003
In this study, we examine how corporate governance structure affects market valuation of capital ... more In this study, we examine how corporate governance structure affects market valuation of capital and R&D investments. We employ three empirical proxies of corporate governance-analyst following, board composition, and institutional holdings, and study whether market valuation of corporate investments varies with governance structure. Our results show that the market valuation of the firm's capital and R&D investments depends critically on analyst following and board composition, but not on institutional holdings. D
Journal of Financial Economics, Jan 1, 1989