Legal protection of investors, corporate governance, and investable premia in emerging markets

Thomas O'Connor (), Stephen Kinsella () and Vincent O'Sullivan

International Review of Economics & Finance, 2014, vol. 29, issue C, 426-439

Abstract: We examine the interaction between the legal protection of investors, corporate governance, and investable premia in emerging markets. In a multi-country setting and using a novel dataset we find that better-governed firms experience significantly greater stock price increases upon equity market liberalization. We look to see whether well-governed firms in poorly governed countries enjoy an investability premium as measured by Tobin's q. We find that they do. Investors look beyond the seemingly weak country-level governance structures, and focus on corporate governance.

Keywords: Investability; Corporate governance; Tobin's q; Emerging markets (search for similar items in EconPapers)
JEL-codes: G15 G30 G34 (search for similar items in EconPapers)
Date: 2014
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Citations: View citations in EconPapers (8)

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Working Paper: Legal protection of investors, corporate governance, and investable premia in emerging markets (2012)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:reveco:v:29:y:2014:i:c:p:426-439

DOI: 10.1016/j.iref.2013.07.003

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