44 research outputs found
Monetary Policy and its Impact on Stock Market Liquidity: Evidence from the Euro Zone
The recent financial crisis has been characterized by unprecedented monetary policy interventions of central banks with the intention to stabilize financial markets and the real economy. This paper sheds light on the actual impact of monetary policy on stock liquidity and thereby addresses its role as a determinant of commonality in liquidity. To capture effects both at the micro and macro level of stock markets, we apply panel estimations and vector autoregressive models. Our results suggest that an expansionary monetary policy of the European Central Bank leads to an increase of stock market liquidity in the German, French and Italian markets. These findings are robust for seven proxies of liquidity and two measures of monetary policy
EXECUTIVE PAY AND PERFORMANCE IN PORTUGUESE LISTED COMPANIES
This essay analyses the relationship between corporate governance practices and Chief Executive Officer (CEO) wages from a sample of Portuguese listed companies over the period from 2002-2011. The relationship between CEO total compensation and shareholders return, firm characteristics, CEO characteristics, board of directors and shareholders characteristics is analysed. It is found that firm specific factors accounts for the majority of the variance in total CEO pay, while firm performance accounts for less than 5%. It is also found that the CEO characteristics, board of directors’ structures, and shareholders features are related with the CEO pay. The policy implications of these results are then derived
Financial flexibility, corporate investment and performance: evidence from financial crises
noThis study examines the impact of financial flexibility on the investment and
performance of East Asian firms over the period 1994–2009. We employ a sample of 1,068
firms and place particular emphasis on the periods of the Asian crisis (1997–1998) and the
recent credit crisis (2007–2009). The results show that firms can attain financial flexibility,
primarily through conservative leverage policies and less commonly by holding large cash
balances. Financial flexibility appears to be an important determinant of investment and
performance, mainly during the Asian 1997–1998 crisis. In particular, firms that are
financially flexible prior to this crisis (1) have a greater ability to take investment
opportunities, (2) rely much less on the availability of internal funds to invest, and
(3) perform better than less flexible firms during the crisis. Our analysis covering the credit
crisis period of 2007–2009 suggests that some of the advantages of flexible firms towards
investing persist but are significantly less pronounced over that period. We also find that
the value of financial flexibility is region/country specific, which may be explained by the
fact that different regions/countries often adopt different macroeconomic policies and
operate in diverse economic/legal environments