External corporate governance and performance: evidence from the Nordic countries

Seppo Ikaheimo, Vesa Puttonen and Tuomas Ratilainen

The European Journal of Finance, 2011, vol. 17, issue 5-6, 427-450

Abstract: We examine the influence of anti-takeover provisions on valuation, stock return and operating performance using data from an extensive sample of publicly listed Nordic companies during the time period of 1999-2004 (similar to Gompers, Ishii, and Metrick 2003 [Corporate governance and equity prices. The Quarterly Journal of Economics 118: 107-55] in the US). We collected data from nine of the most commonly used provisions. The results suggest that anti-takeover provisions have a negative impact on valuation, no effect on stock return, and a positive influence on operating performance. Analysing the influence of each reveals dual-class stock to be the single most important provision dummy contributing to the negative valuation, though the discount decreases over the years.

Keywords: corporate governance; anti-takeover provision; Nordic countries; dual-class share (search for similar items in EconPapers)
Date: 2011
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Persistent link: https://EconPapers.repec.org/RePEc:taf:eurjfi:v:17:y:2011:i:5-6:p:427-450

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DOI: 10.1080/1351847X.2010.543832

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