PUBLICACIONES

Minority Stockholders' Protection in a New Corporate Control Law: Market Implications in an Emerging Economy

ISI: Minority Stockholders' Protection in a New Corporate Control Law: Market Implications in an Emerging Economy

FRANCO PARISI F., IKE MATHUR., LANCE NAIL.

2009 - Emerging Markets Finance and Trade - Vol. 45, Nº 6, Pp 4 - 19

Abstract

This paper analyzes the effect of a new corporate governance law in the emerging capital market of Chile to determine if capital markets perceived the intended protection of minority stockholders against wealth expropriation as effective. The unique nature of the new law allowed for voluntary adoption during the initial three-year period, after which it became mandatory. We find no evidence of superior abnormal returns for those firms voluntarily adopting the new law versus those forced to accept the new law as it became mandatory. Trading volume also increased for those not adopting and declined for those that did voluntarily adopt. These results indicate that the capital markets did not perceive voluntary adoption of the new law as effective protection for minority shareholders. We also find a greater presence of institutional investors in the ownership structure of those firms not voluntarily adopting the new law, indicating their monitoring role by investing in firms with better corporate governance practices. Our results suggest that, in the Chilean case, the presence of strong institutional investors is as effective a corporate governance mechanism as is the new law.

Keywords

¿Quieres seguir leyendo? [Accede a la publicación completa]

Mercado de franquicias creció 60% en Chile en cuatro años

El retorno para el franquiciado promedia los 25 meses. Con inversiones que van desde los US$1.200, el modelo se ha convertido en una alternativa real para aquellos que quieren empezar nuevos negoci...

MPBD 2017: Primer Reporte de Marketing y Publicidad Basado en Datos

Este primer reporte se trata de un documento inédito que permite poner en contexto cómo se encuentra actualmente el “data marketing” en Chile, abordando temas especí...

Todos los Derechos © 2014 | Departamento de Administración - Facultad de Economía y Negocios - Universidad de Chile - Diagonal Paraguay 257, torre 26, oficina 1101, piso 11, Santiago, Chile.