Rong Ding

Regional institutions, financial analysts and stock price informativeness

ABSTRACT This paper investigates the impact of legal institutions on the external governance role of equity analysts in enhancing the corporate information environment. By analysing a sample of Chinese listed firms between 2003 and 2013, we find that analyst coverage is positively related to stock price informativeness. Firms located in provinces where legal institutions are stronger, as indicated by better development of market intermediaries and lower levies and charges on firms, are less likely to withhold value-relevant information. Financial analysts play a more effective role in improving stock informativeness in provinces with less developed legal institutions.

Determinants and value relevance of UK CEO pay slice

Abstract This paper studies the CEO pay slice (CPS) of UK listed firms during the period 2003 to 2009. We investigate the determinants of CPS. We study the links between CPS and measures of firm performance. We find that firms with higher levels of corporate governance ratings and those with more independent boards tend to have higher CPS. In addition, we find that CEOs are more likely to receive lower compensation when they chair the board and when they work in firms with large board size. We also find that higher CPS is positively associated with firm performance after controlling for the firm-specific characteristics and corporate governance variables. We get compatible results when we examine the association between equity-based CPS and firm performance. Our results remain robust to alternative accounting measures of firm performance. Our results suggest that high UK CPS levels do indeed reflect top managerial talent rather than managerial power.

Media Coverage and Stock Returns: Evidence from Chinese Cross-Listed Firms

The media, such as newspapers and TV broadcasting, serves as an important outlet for disseminating information to the general public. Because information covered in the media could be obtained from other sources, such information is regarded as “stale information” (Tetlock, 2008) or “second-hand information” (Davies and Canes, 1978). According to the semi-strong form of the Efficient Market Hypothesis (Fama, 1970, 1991), the stock price should immediately reflect all publicly available information, implying that the information provided by the media should have little effect on stock prices. However, recent studies show that the news covered by the media does have an impact on stock returns (Tetlock, 2007, 2008; Tetlock et al., 2008; Fang and Peress, 2009).