Local investors and corporate governance

• 成果类型: Article
• 署名作者: Chhaochharia, Vidhi; Kumar, Alok; Niessen-Ruenzi, Alexandra
• 署名单位: University of Miami; University of Mannheim
• 刊物名称: JOURNAL OF ACCOUNTING & ECONOMICS
• ISSN/ISSBN: 0165-4101
• DOI: 10.1016/j.jacceco.2012.03.002
• 发表日期: 2012
• 关键词: institutional investors; SHAREHOLDER ACTIVISM; individual investors; AGENCY COSTS; STOCK; OWNERSHIP; geography; IMPACT; INVESTMENT; INFORMATION

摘要

This paper shows that local institutional investors are effective monitors of corporate behavior. Firms with high local ownership have better internal governance and are more profitable. These firms are also less likely to manage their earnings aggressively or backdate options and are less likely to be targets of class action lawsuits. Further, managers of such firms exhibit a lower propensity to engage in empire building and are less likely to lead the quiet life. Examining the local monitoring mechanisms, we find that local institutions are more likely to introduce shareholder proposals, increase CEO turnover, and reduce excess CEO pay. (C) 2012 Elsevier B.V. All rights reserved.