Narjess Boubakri

Privatization, corporate governance and economic environment: Firm-level evidence from Asia

Abstract We examine the postprivatization performance of newly privatized firms in Asia and document how the private ownership structure evolves over time. We show that privatization leads to an increase in profitability, efficiency, and output in former state-owned firms from Asia. However, these changes are generally less significant than those reported in other developing countries (DCs). We also find that higher improvements in performance are associated with certain aspects of (1) corporate governance and (2) the economic environment. Finally, we show that governments generally do not relinquish control and private ownership concentrates over time, but by far less than what we observe elsewhere in developing countries.

Is There Any Life After Going Public? Evidence from the Canadian Market

This article examines the survival profile of Canadian initial public offerings (IPOs). More specifically, the authors develop multinomial logit models based on the information contained in the prospectus and attempt to determine what factors influence the post-issue transition of the IPO firms into survivors, non-survivors, or targets. They find that larger IPOs experience a lower probability of delisting, and higher underpricing implies a lower probability of failure or becoming a target. Further, the presence of venture capitalists at the IPO stage seems to influence the post-IPO transition state. The authors also estimate an accelerated-failure-time model as a robustness test and find that the survival time for IPOs increases with the level of underpricing and decreases during hot issue periods. This latter result suggests that leaving money on the table is not a bad thing as generally perceived and has some beneficial outcomes such as enhancing the survivability of the firm.

International Diversification and Corporate Social Responsibility

Using a large sample of 3,040 U.S. firms and 16,606 firm-year observations over the 1991-2010 period, we find strong evidence that firm internationalization is positively related to the firm’s corporate social responsibility (CSR) rating. This finding persists when we use alternative estimation methods, samples, and proxies for internationalization and when we address endogeneity concerns. Next, we find that firm characteristics such as size, profitability, growth opportunities, R&D, and advertising expenses condition the link between internationalization and CSR. We finally provide novel evidence that firms with extensive foreign subsidiaries in countries with well-functioning political and legal institutions have better CSR ratings.

Large Shareholders and Target Returns: International Evidence †

Abstract We examine the market valuation of targets with multiple large shareholders (MLS) and single large shareholder (SLS) structures, in an international sample of M&A announcement in 19 countries outside North America. We find that the presence and power of MLS in these firms are negatively associated with abnormal returns and first-bid-to-merger-completion returns, suggesting that MLS mitigate agency problems in the target, and hence their acquisition is perceived as “a loss of good governance.” The negative association between MLS targets and returns is stronger in widely held firms suggesting that MLS indeed curb expropriation of minority shareholders. By contrast, when the second largest shareholder in the MLS structure of the target is a family, we find positive cumulative abnormal returns at the merger announcement, suggesting exacerbated agency problems in these firms that should benefit from the “acquisition of good governance.” Our evidence is robust to a battery of tests and to addressing potential endogeneity.