Research output: Contribution to Journal/Magazine › Journal article › peer-review
Research output: Contribution to Journal/Magazine › Journal article › peer-review
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TY - JOUR
T1 - Does compliance with the German corporate governance code have an impact on stock valuation?
T2 - 28th Annual Congress of the European-Accounting-Association
AU - Goncharov, Igor
AU - Werner, Joerg Richard
AU - Zimmermann, Jochen
PY - 2006/9
Y1 - 2006/9
N2 - Since 2002 company law requires listed German corporations to declare their degree of conformity to the German Corporate Governance Code (GCGC). We examine whether there is a pricing effect connected to the declared degree of compliance for a sample of (big) publicly traded German companies listed in the DAX 30 and MDAX. We find that the degree of compliance with the Code is value-relevant after controlling for an endogeneity bias. This shows that the capital markets find the rules in the code meaningful and that there is capital market pressure to adopt the Code regulation. Our findings also suggest that the capital market fills a possible "control vacuum" resulting from the withdrawal of commercial banks from their (former) influential role in the German "insider control" corporate governance model.
AB - Since 2002 company law requires listed German corporations to declare their degree of conformity to the German Corporate Governance Code (GCGC). We examine whether there is a pricing effect connected to the declared degree of compliance for a sample of (big) publicly traded German companies listed in the DAX 30 and MDAX. We find that the degree of compliance with the Code is value-relevant after controlling for an endogeneity bias. This shows that the capital markets find the rules in the code meaningful and that there is capital market pressure to adopt the Code regulation. Our findings also suggest that the capital market fills a possible "control vacuum" resulting from the withdrawal of commercial banks from their (former) influential role in the German "insider control" corporate governance model.
KW - corporate governance
KW - value relevance
KW - code compliance
KW - declaration of conformity
KW - Germany
KW - VALUE-RELEVANCE
KW - INFORMATION ASYMMETRY
KW - CAPITAL-MARKETS
KW - AGENCY COSTS
KW - PERFORMANCE
KW - EARNINGS
KW - STATEMENTS
KW - OWNERSHIP
KW - RETURNS
KW - SYSTEMS
U2 - 10.1111/j.1467-8683.2006.00516.x
DO - 10.1111/j.1467-8683.2006.00516.x
M3 - Journal article
VL - 14
SP - 432
EP - 445
JO - Corporate Governance: An International Review
JF - Corporate Governance: An International Review
SN - 0964-8410
IS - 5
Y2 - 18 May 2005 through 20 May 2005
ER -