GOVERNANCE CHANGES FOR FIRMS ADDED TO THE S&P 500

Xin Li and Tih Koon Tan

The International Journal of Business and Finance Research, 2015, vol. 9, issue 4, 21-35

Abstract: What happens to corporate governance after a firm is added to the S&P 500 index? Using firms added from 1994 to 2007, this paper examines how governance mechanisms change for these firms. Specifically, we look at both the overall governance and details on how each mechanism changes. We find that governance improves after being added to the index. Controlling for firm size, leverage, prior firm performance, and growth opportunities, the market reacts positively to governance improvements as a whole. In addition, changes in governance are positively associated with changes in operating performance

Keywords: Corporate Governance; S&P 500; Firm Performance (search for similar items in EconPapers)
JEL-codes: G34 G39 (search for similar items in EconPapers)
Date: 2015
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Citations: View citations in EconPapers (5)

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