Buy The Rumor, Sell The News! What About Takeover Rumors?

This paper attempts to quantify the short-term impact of takeover rumors on target stock prices. The study was conducted on the French stock market between 1997 and 2011 and concerns 200 rumors that appeared in the media (news agencies, newspapers, and Web sites). Our results show that this particular kind of information has a significant impact on the prices of target companies around and after the date of rumor appearance. The best performance of target shares is observed 50 days after the dissemination of the rumors in the media, with an average return of 4%. This performance is mainly explained by three components:  credibility, rumor characteristics, and the anticipated effects of the takeover bid.

The Ownership Structure Influence on the Dividend Distribution Policy: The Case of Listed French Family Firms

The usefulness and justification of corporate dividend distribution policies are among the most controversial topics in financial theory. This research aims to shed light on this issue by studying the case of French listed family firms. These companies have a specific governance structure that influences the dividend distribution policy. We examined the impact of the family ownership structure on dividend distribution policy and present empirical study results for a sample of listed French family companies. We explain the dividend distribution policy through the family shareholding structure and the presence of institutional investors and their possible influence. The theoretical framework is the agency relationship. The results show that family ownership positively affects dividend distribution; however, institutional investors have a negative influence

The Effect of Earnings Management on Bid-Ask Spread and Market Liquidity

The earnings management is used by companies to smooth out fluctuations in earnings. But it take advantage of how accounting rules are applied and creates financial statements that inflate earnings. Thus, studying the earnings management proves to be essential for better governance. The main purpose of this paper is to argue the extent that earnings management lowers liquidity. It should increase information asymmetry and impair trading liquidity. Using a sample of French firms from 2008 to 2011, we find that firms that manage earnings have wider bid-ask spreads. Our results are robust for both of two well-established measures of market liquidity. Therefore, the empirical results indicate that firms that exhibit greater earnings management are associated with lower market liquidity. These findings are in line with adverse selection and shed light on the role corporate governance devices can play in the consideration of shareholder interest’s protection, which leads to improved stock market liquidity levels. Keywords: Earnings management, Bid-ask spreads, stock liquidity, discretionary accrual

An Investigation Of The Relation Between Corporate Governance And Liquidity: Empirical Evidence From France

This study investigates the impact of corporate governance effectiveness on the market stock liquidity. It is innovative, since we study, on an order driven market, the global effect of corporate governance and the effect of specific governance sub-indexes. Drawing on a sample of 287 French firms from 2007 to 2012, we find that corporate governance is a significant determinant of stock liquidity. Indeed, companies with an effective corporate governance have a narrower spreads. That’s mean that corporate governance may alleviate information asymmetry and improve the market stock liquidity of French companies. Our results are remarkably robust to other set of measures of liquidity as the effective spread measure and illiquidity ratio. These results suggest that firms may improve stock market liquidity by adopting best practices of corporate governance that mitigate informational asymmetries

The impact of disclosure on Information Asymmetry and liquidity of French listed companies

Le présent article a pour objectif d’étudier l’effet de l’étendue de la divulgation d’informations sur l’asymétrie d’informations et la liquidité des titres des entreprises françaises. Notre échantillon regroupe 196 entreprises françaises cotées à l’indice SBF 250 sur une période s’étalant de 2004 à 2007. Les résultats montrent que l’étendue de la divulgation d’informations dans les rapports annuels influence positivement la liquidité du marché français. Ceci est expliqué par l’effet négatif des mécanismes d’informations sur la composante sélection adverse. Cet effet est d’autant plus confirmé par l’effet de l’application des normes IFRS rendues obligatoires pour les entreprises françaises à partir de 2005. Ce résultat devrait inciter les autorités françaises et les entreprises à améliorer davantage leur environnement informationnel comme moyen indispensable pour réduire les coûts de l’asymétrie d’informations et prévenir le risque d’illiquidité

Comment la gouvernance d’entreprise influe sur la transparence de l’information

peer reviewedLes travaux de recherche d’Aymen Ajina menés sur un échantillon d’environ 150 entreprises cotées à la Bourse de Paris identifient les caractéristiques de leurs systèmes de gouvernance qui influent sur la qualité et l’étendue de leu

Market Liquidity, Disclosure and Corporate Governance

A travers ce travail doctoral, nous cherchons à étudier l’influence des mécanismes de gouvernance d’entreprise sur la liquidité des titres. Nous nous focalisons aussi sur l’efficacité et la qualité du système de gouvernance en passant d’une étude fragmentée des mécanismes de contrôle à une étude systémique de la gouvernance d’entreprise. Les résultats défendent une orientation législative française envers l’adoption de certaines normes pour la bonne conduite de la gouvernance d’entreprise. L’étendue des informations publiées dans les rapports annuels augmente la visibilité d’une entreprise, réduit éventuellement l’asymétrie d’informations et augmente la liquidité des titres. Ces effets sont d’autant plus prononcés par l’application des normes IFRS rendues obligatoires à partir de 2005. Par ailleurs, nous montrons que le développement de la demande d’actionnariat institutionnel est une nécessité pour le marché parisien, afin de favoriser sa croissance de façon générale et soutenir sa liquidité. Nous mettons en évidence également un impact positif de la taille du conseil d’administration, de l’indépendance et de l’expertise financière des administrateurs, et du nombre des réunions du conseil sur la liquidité des titres. De même, le comité d’audit offre un support indispensable pour prévenir le risque « d’illiquidité »

The impact of financial disclosure on the information asymmetry and the liquidity of French listed companies

peer reviewedThis paper examines the relationship between the extent of financial disclosure, information asymmetry and stock-market liquidity in France. Based on a sample of 196 French listed firms over a period from 2004 to 2007, we find that there is a positive and statistically significant relationship between the extent of information displayed through annual reports and market liquidity. This is explained by the negative effect of the disclosure on the adverse selection component of the bid-ask spread. This effect is confirmed by the commitment to IFRS by French-listed firms since 2005. This result should encourage French authorities to enhance their informational environment as a means to reduce information asymmetry and to prevent the risk of illiquidity

Do Board Characteristics Affect Information Asymmetry?

peer reviewedIn this paper, we investigate the empirical relationship between corporate governance and information asymmetry across a range of French firms. Based on a cross-sectional analysis, our study of the empirical relationship between corporate governance and information asymmetry involved 160 companies over the years 2008-2010. Mechanisms of corporate governance include the characteristics of the board of directors. Our results seem to indicate a significant relationship between certain mechanisms of corporate governance and the information asymmetry of the French market. These mechanisms can reduce adverse selection costs, and make exchanges more transparent. These results suggest that firms with efficient corporate governance mechanisms may reduce informative asymmetry and improve transparency between investors

Influence de la communication d’informations sur le comportement des analystes financiers en France

peer reviewedThis article aims to study the influence of the disclosure on the behavior of financial analysts. The literature demonstrates first the significant influence of analysts on the behavior of investors and second, the perception by analysts as leader’s actor affecting the stock price of the company. Thus, financial analysts are important intermediates information in financial markets. Our sample includes 189 French companies during the period 2007 to 2011. The results reveal a positive relationship between the extent of disclosure and the number of financial analysts firms in the sample. Thus, the transparency of the French market must go through the introduction of more specific constraints to the characteristics of financial analysts