Does Weak Governance Cause Weak Stock Returns? An Examination of Firm Operating Performance and Investors' Expectations

By John E. Core, W. Guay, T. Rusticus. 2006

902 citations recorded by the source corpus.

View Paper: https://www.semanticscholar.org/paper/29b4a16758f1d58d056f786d7788e935b84bad10

How researchers see this paper

The researchers whose trusted networks rank it highest, strongest advocate first. Every researcher gets a different order.

In Accounting

In Finance

Citations in the corpus

Governance structure and the weighting of performance measures in CEO compensation (2006, neutral): “1 Core, Guay, & Rusticus (2006) find that firms with higher Gompers’ G have worse accounting”
Corporate Governance, Accounting Outcomes, and Organizational Performance (2007, methodology): “Core et al. (2006) find very little evidence to suggest that the relation is attributable to unexpected performance shocks, raising the possibility that the relation may be indicative of a market misunderstanding of the importance of governance structures.”
Learning and the Disappearing Association Between Governance and Returns (2012, methodology): “Our analysis here extends the studies of Core et al. (2006) and Giroud and Mueller (2011), which examine (with mixed results) whether the correlation between governance and returns was due to markets’ forecasting errors about the difference between good-governance and poor-governance firms, but…”
Boardroom Centrality and Firm Performance (2013, neutral): “27,879 9874 9887 9870 9874 3735 4774 R-square 0.031 0.044 0.038 0.042 0.029 0.054 0.039 H0: Coefficient Test 0.0000 0.0002 0.0251 0.0431 0.0000 0.9030 (footnote continued) errors (e.g., Core et al., 2006; Bebchuk et al. forthcoming).”
Product Market Competition, Corporate Governance, and Firm Value: Evidence from the EU Area (2011, positive): “…documents that good corporate governance leads to higher firm valuations by mitigating the conflicts of interest between managers and shareholders (e.g., Yermack, 1996; Gompers et al., 2003 (“GIM”); Cremers and Nair, 2005; Core et al., 2006; Chhaochharia and Grinstein, 2007; Bebchuck et al., 2009).”
Directors׳ and officers׳ liability insurance and the cost of equity☆ (2016, methodology): “Following Core et al. (2006), we measure operating performance by industry adjusted operating income before depreciation scaled by average assets (adjusted ROA).”
Do Antitakeover Provisions Spur Corporate Innovation? A Regression Discontinuity Analysis (2018, positive): “For example, while Gompers et al. show that firms with a larger number of ATPs have lower long-term stock returns, Core, Guay, and Rusticus (2006) question the previous findings, arguing that there is no conclusive evidence indicating that ATPs affect actual firm performance.”
Modeling volatility and conditional correlations between socially responsible investments, gold and oil (2014, background): “Core et al. (2006) examine the impact that shareholder rights have on abnormal stock returns over the period 1990 to 1999.”
One Share - One Vote: The Theory (2007, result): “Similar results are found when rms are sorted according to other corporate governance measures (Core et al., 2006; Cremers and Nair, 2005), suggesting that "corporate governance" risk is correctly priced.”
Director Ownership, Governance, and Performance (2013, methodology): “Regarding the control variables, prior literature (e.g., Core, Holthausen, and Larcker (1999), Gillan et al. (2003), and Core et al. (2006)) suggests that industry performance, return volatility, growth opportunities, and firm size are important determinants of firm performance.”