Rezaul Kabir

Takeover defenses, ownership structure and stock returns in the Netherlands: an empirical analysis

This study empirically examines the relationships between a firm’s takeover defenses and its ownership structure and stock returns. Analyzing data of Dutch listed companies, we find that multiple antitakeover defenses are increasingly adopted when firms are characterized by relatively lower ownership concentration. The evidence supports the hypothesis that more concentrated ownership of shares provides more effective monitoring of managers. As defense by issuing preferred share has recently been the most widely adopted mechanism in the Netherlands, its impact on shareholders’ wealth is also analyzed. We observe the presence of two opposing effects of this antitakeover measure.

Insider trading restrictions and the stock market: Evidence from the Amsterdam Stock Exchange

This paper examines the effect of introducing insider trading restrictions on the behaviour of the Amsterdam Stock Exchange. From 1987 on, insiders are no longer allowed to trade two months before an annual earnings announcement. The results indicate that stocks became less liquid (when liquidity is measured by trading volume) when insiders were not allowed to trade. We also find some evidence that the introduction of insider trading restrictions reduced the stock markets speed of adjustment to positive earnings news.

Share price behaviour around trading suspensions on the London Stock Exchange

The share price behaviour associated with a sample of trading suspensions on the London Stock Exchange is analysed. Trading suspensions are found to be prevalent, and last for a relatively long time period. The results indicate that suspensions on the London Stock Exchange are, on average, preceded by a substantial increase in share price, thus reflecting anticipatory price-behaviour. The presence of significant positive abnormal return following trading suspensions is also detected. This suggests that either the complete impact of information release takes place gradually, or not all relevant information is disclosed during the suspension period.

Is the Pay-Performance Relationship Always Positive?

This study examines the widespread belief that executive pay should reflect firm performance. We compile a hand-collected data set of compensation paid to executive directors of Dutch listed companies and analyze if executive compensation is indeed determined by firm performance. A variety of accounting-based and capital market-based performance measures are used. The analysis also encompasses both contemporaneous and lagged relationships, and controls for firm, time and industry characteristics. Our robust empirical analysis fails to detect a positive pay-performance relationship. The finding questions the conventional wisdom that executive pay helps to align shareholder interests with those of managers. It is consistent with the view that powerful managers can influence their own pay. The results of the study suggest that other means of resolving agency problems and novel explanations of executive compensation may provide useful insights.

Does corporate governance shape the relationship between corporate social responsibility and financial performance

The theoretical and empirical relationships between corporate social responsibility (CSR) and corporate financial performance are not without controversy. Yet, CSR activities are increasingly undertaken by a large number of firms, not only in developed countries but also in emerging countries. This paper aims to investigate the moderating effect of different aspects of corporate governance, which are foreign and state ownership, board size and board independence, on the relationship between CSR and financial performance.,A sample of Vietnamese listed firms is analyzed. Robust regression analysis is performed using ordinary least squares as well as fixed-effects and two-stage least squares model.,Ordinary least squares regression results show that CSR activities affect the financial performance of firms positively. Furthermore, corporate governance features like foreign ownership, board size and board independence strengthen the positive relationship between CSR and financial performance, but there is no such impact of state ownership.,Previous studies mostly investigate the direct effect of CSR on financial performance. A few studies examine the moderating effect of corporate governance, which is ownership concentration and board gender diversity. As an emerging country, Vietnam has some specific characteristics on corporate governance. This paper contributes by investigating the moderating effect of few major aspects of corporate governance, which are foreign and state ownership, board size and board independence.