To steal or not to steal: Firm attributes, legal environment, and valuation

Newly released data on corporate governance and disclosure practices reveal wide within-country variation, with the variation increasing as legal environment gets less investor friendly. This paper examines why firms practice high-quality governance when law does not require it; firm attributes that are related to the quality of governance; how the attributes interact with legal environment; and the relation between firm valuation and corporate governance. A simple model, in which a controlling shareholder trades off private benefits of diversion against costs that vary across countries and time, identifies three relevant firm attributes: investment opportunities, external financing, and ownership structure. Using firm-level governance and transparency data on 859 firms in 27 countries, we find that firms with greater growth opportunities, greater needs for external financing, and more concentrated cash flow rights practice higher-quality governance and disclose more. Moreover, firms that score higher in governance and transparency rankings are valued higher in the stock market. Equally important, all these relations are stronger in countries that are less investor friendly, demonstrating that firms do adapt to poor legal environments to establish efficient governance practices.http://deepblue.lib.umich.edu/bitstream/2027.42/39939/3/wp554.pd

Corporate Stability and Economic Growth

Newly released data on corporate governance and disclosure practices reveal wide within-country variation, with the variation increasing as legal environment gets less investor friendly. This paper examines why firms practice high-quality governance when law does not require it; firm attributes that are related to the quality of governance; how the attributes interact with legal environment; and the relation between firm valuation and corporate governance. A simple model, in which a controlling shareholder trades off private benefits of diversion against costs that vary across countries and time, identifies three relevant firm attributes: investment opportunities, external financing, and ownership structure. Using firm-level governance and transparency data on 859 firms in 27 countries, we find that firms with greater growth opportunities, greater needs for external financing, and more concentrated cash flow rights practice higher-quality governance and disclose more. Moreover, firms that score higher in governance and transparency rankings are valued higher in the stock market. Equally important, all these relations are stronger in countries that are less investor friendly, demonstrating that firms do adapt to poor legal environments to establish efficient governance practices.Corporate Governance, Investment Opportunities, External Financing, Ownership, Legal Environment, Valuation

The effects of debt subsidies on corporate investment behavior

This paper argues that credit subsidies are ineffective in stimulating business investment in productive assets. Instead, they lead to an increase in corporate holdings of financial assets and real estate. For empirical verification, the investment patterns in a sample of 241 Korean corporations listed on the Korean Stock Exchange between 1984 and 1988 were examined. The authors found a significant positive relation between corporate speculative asset holding and access to subsidized loans. Their estimates indicate that without interest rate controls and other forms of subsidy, corporate holdings of speculative assets would have been one-seventh of observed levels. Moreover, most corporate real estate holdings appear to be unrelated to production activities. Little evidence is found that the Korean government's interest rate controls and credit allocation policy have accelerated expansion of corporate investment. If anything, the controls are partly to blame for the overheated Korean stock market during 1986-88.Economic Theory&Research,International Terrorism&Counterterrorism,Banks&Banking Reform,Environmental Economics&Policies,Municipal Financial Management

To Steal or Not to Steal: Firm Attributes, Legal Environment, and Valuation

Data on corporate governance and disclosure practices reveal wide within-country variation that decreases with the strength of investors' legal protection. A simple model identifies three firm attributes related to that variation: investment opportunities, external financing, and ownership structure. Using firm-level governance and transparency data in 27 countries, we find that all three firm attributes are related to the quality of governance and disclosure practices and that firms with higher governance and transparency rankings are valued higher in stock markets. All relations are stronger in less investor-friendly countries, demonstrating that firms adapt to poor legal environments to establish efficient governance practices.Corporate Governance, Investment Opportunities, External Financing, Ownership, Legal Environment, Valuation

Nitrogen doping of carbon nanoelectrodes for enhanced control of DNA translocation dynamics

Controlling the dynamics of DNA translocation is a central issue in the emerging nanopore-based DNA sequencing. To address the potential of heteroatom doping of carbon nanostructures to achieve this goal, herein we carry out atomistic molecular dynamics simulations for single-stranded DNAs translocating between two pristine or doped carbon nanotube (CNT) electrodes. Specifically, we consider the substitutional nitrogen doping of capped CNT (capCNT) electrodes and perform two types of molecular dynamics simulations for the entrapped and translocating single-stranded DNAs. We find that the substitutional nitrogen doping of capCNTs stabilizes the edge-on nucleobase configurations rather than the original face-on ones and slows down the DNA translocation speed by establishing hydrogen bonds between the N dopant atoms and nucleobases. Due to the enhanced interactions between DNAs and N-doped capCNTs, the duration time of nucleobases within the nanogap was extended by up to ~ 290 % and the fluctuation of the nucleobases was reduced by up to ~ 70 %. Given the possibility to be combined with extrinsic light or gate voltage modulation methods, the current work demonstrates that the substitutional nitrogen doping is a promising direction for the control of DNA translocation dynamics through a nanopore or nanogap based of carbon nanomaterials.Comment: 11 pages, 4 figure