Khine Kyaw

Liquidity commonality and the intervalling effect

Past studies of liquidity commonality have reported conflicting findings regarding the relationship between market liquidity and firm size. The present paper provides empirical evidence that underlying estimation problems might be responsible for these results. We develop a model of information and spreads that provides some insights into the firm size–liquidity relationship. Our empirical evidence confirms the main testable implications of the model and presents evidence that the presence and strength of common covariability in liquidity depends upon the interval over which liquidity movements are measured. These intervalling effects are caused by delays in information being incorporated into bid and ask spreads.

Can board gender diversity promote corporate social performance

This paper examines if gender diversity on corporate boards promotes corporate social performance (CSP) across industries and across countries.,Fixed-effect panel models are estimated using Europe-wide data from 2002 through 2013. Instrumental variable estimation and propensity score matching are also used to control for potential endogeneity.,Board gender diversity (BGD) improves environmental and social performance and consequently the CSP. Although the positive effect of gender diversity is prevalent across industries, the effect is more pronounced for firms in emerging markets.,The findings suggest that gender law that fosters gender diversity can promote CSP in firms, and the benefit can be enjoyed with just an introduction of one female director to the board. Promotion of gender diversity in Europe is most beneficial in emerging markets.,The results provide new insights to the literature, as we find that a critical mass of female directors on boards is not required to promote CSP. The research also highlights that BGD enhances CSP irrespective of the industry, and the effect on CSP is more pronounced in emerging markets where regulations regarding CSR are not so clear-cut.

Reputational Damage After Major Accidents

Consequences of a major accident can take two main forms. The first and most obvious is direct losses arising from the accident, represented by physical damage. In addition to this, a less obvious effect of an accident is damage to the reputation of the company. Estimating this is especially challenging because it can be encountered in various forms. For example, loss of future sales or a change in the relationships with stakeholders, such as lenders and suppliers, resulting in damage to the reputation of a company is often overlooked. This chapter introduces the approaches emerging in the literature that are increasingly being used to quantify the reputational damage of events that companies have experienced in the past. Advantages and disadvantages of the approaches are also discussed. Studying past events helps improve the prediction of potential consequences of an accident in the future and raise risk awareness of analysts.