Advances in Financial Economics – serie

Advances in Financial Economics publishes peer reviewed quality manuscripts on any aspects of financial economics including corporate finance, financial institutions and markets and microeconomics.

Advances in Financial Economics publishes peer reviewed quality manuscripts on any aspects of financial economics including corporate finance, financial institutions and markets and microeconomics.

This volume focuses on recent pricing puzzles in investments. The valuation of Internet companies, effects of firm size in takeover studies, and long-run performance of mergers in the telecommunications industry are all seen as riddles for the Efficient Markets Hypothesis. Explanations may be found in studies of the effects of differences in investor risk/return preferences, information and liquidity. Also featured are studies describing recent innovations in corporate finance, such as an experimental study of discount rates, an analysis of issues related to the estimation of internal cash flows, corporate payout policy, and the use of convertible and warrant bonds by Japanese firms.

Papers in this volume focus upon corporate governance, broadly defined as the system of controls that helps the corporation effectively manage, administer and direct economic resources. Questions of what and how to produce become equally important as organizations strive to better serve demanding customers. As a result, the design and control of effective organizations structure has been described by the vertical and horizontal relationships among the firm, its customers and suppliers. More recently, researchers have come to understand that the efficiency of firms depends upon the ability of participants to find effective means to minimize the transaction costs of coordinating productive activity. As financial economists have learned, resource allocation will be efficient so long as transaction costs remain low and property rights can be freely assigned and exchanged. An important problem that must be addressed is the so-called agency problem resulting from the natural conflict between owners and managers. Agency costs are the explicit and implicit transaction costs necessary to overcome the natural divergence of interest between agent managers and principal stockholders. The value-maximizing organization design minimizes unproductive conflict within the firm. Papers in this volume show how corporate control mechanisms inside and outside the firm have evolved to allocate decision authority to that person or organization best able to perform a given task.

This volume contains fourteen research papers with theoretical and empirical treatment of important financial aspects of corporate governance. The papers cover major corporate governance issues such as the role of the board of directors, ownership structure, ownership concentration, and the influence of outside blockholders. Another salient feature of this collection is that it offers substantial international evidence, including that from the United States of America, Australia, Germany, Saudi Arabia, China, India, and Malaysia.

The advent of new stock markets (the German Neuer Markt, the French Nouveau Marche, the Italian Nuovo Mercato and Nasdaq Europe) has been one of the most important reforms of stock exchanges in Continental Europe in the 1990s. These stock markets aimed at attracting early stage, innovative and high-growth firms that would not have been viable candidates for public equity financing on the main markets of European stock exchanges. Of these new markets, the Neuer Markt emerged as Europe's answer to NASDAQ. However, Europe's new stock markets met with only limited success. Stock prices plummeted after the ending of the stock market bubble and new markets suffered from poor liquidity, insider trading scandals and accounting frauds. This volume provides an overview of the rise and fall of Europe's new stock markets. It contains twelve papers which investigate the characteristics, the ownership structure and the market performance of companies in the short and long run. In addition this volume examines the role of venture capitalists. New stock markets offered venture capitalists an attractive exit for their investments and helped to create a more vibrant venture capital industry in Europe. The private equity market in Europe today is as large as it was just before the advent of new stock markets. As such, the need for stock markets that allow private equity investors to divest their equity stakes in growth companies continues to exist.

Papers in this volume focus on corporate governance broadly defined as the system of control that helps corporations effectively manage, administer, and direct economic resources. Questions of what and how to produce become equally important as organizations strive to better serve demanding customers. As a result, the design and control of effective organizations have become an integral part of financial economics. Traditionally, organization structure has been described by the vertical and horizontal relationships among the firm, its customers and suppliers. More recently, researchers have come to understand that the efficiency of firms depends upon the ability of participants to find effective means to minimize the transaction costs of coordinating productive activity. As financial economists have learned, resource allocation will be efficient so long as transaction costs remain low and property rights can be freely assigned and exchanged. An important problem that must be addressed is the so-called agency problem resulting from the natural conflict between owners and managers. Agency costs are the explicit and implicit transaction costs necessary to overcome the natural divergence of interest between agent managers and principal stockholders. The value-maximizing organization design minimizes unproductive conflict within the firm. Papers in this volume show how corporate control mechanisms inside and outside the firm have evolved around the world to allocate decision authority to that person or organization best able to perform a given task.

While "Advances" continues to publish papers from any area of Finance, the focus of this issue is on corporate governance, broadly defined as the system of controls that helps corporations and other organizations effectively manage, administer, and direct economic resources. Papers of this title deal with the role played by boards of directors, impact of ownership, executive compensation, and investor protection. Other papers deal with stock repurchases, default, banking, financial sector development, and the Asian financial crisis. Papers cover a wide range of international experience, including evidence from the U.S., Japan, Israel, Malaysia, China, and New Zealand. Papers cover a wide range of international experience with this issue focusing on corporate governance. This book series is available electronically at website.

Volume 14 of "Advances in Financial Economics" presents recent research on corporate governance from a number of countries across the world, including the United States, Spain, Malaysia, Israel and others. Many important corporate governance mechanisms are examined, such as board characteristics (size, independence, duality, staggered form), ownership structure, legal protection of shareholders, annual general meetings, and executive compensation. The findings have implications for mergers and acquisitions, IPOs, related party transactions, CEO pay, volume of trading and stock volatility, and underwriting. Thus, the implications of corporate governance for firm performance and shareholder experience are covered through the salient activities of firms.

This volume, in the series "Advances in Financial Economics", discusses such topics as the global variation in financial ratios, trading costs of target firms around corporate takeovers, and economic activity measures in nonlinear asset pricing.

This volume contains eight empirical papers that examine corporate governance from a number of different perspectives. Howe et al investigate how governance can influence short- and long-term performance in the case of Special Purpose Acquisition Companies; Javakhadze et al analyze limits to convergence in international corporate governance practices; Barak and Lauterbach focus on the private benefits of control; and Dong examines the relation between the discipline of options and corporate debt and the design of executive compensation. Jiang et al measure the effect of R&D expenditures on bondholders; Gondhalekar et al examine the capital market response to financial restatements; Al-Khouri reports robust evidence that privately owned banks are more risky than government-owned banks; and Luo and Jackson conclude that the positive relationship between tunneling and executive compensation implies personal benefits for controlling shareholders at the expense of minority shareholders.

This volume contains a set of empirical papers by a set of global scholars who examine corporate governance and market regulation from a variety of perspectives. Jiang, Kim and Zhang argue that in certain cases an ex post increase in CEO pay can prevent the ex ante problem of managerial underinvestment and thereby help to reduce the agency problems characteristic of modern firms. Akyol and Cohen focus on firms' use of executive search firms versus allowing internal members to nominate new directors to serve on the board of directors. Choi, Ferris, Jayaraman and Sabherwal examine 361 CEO terminations occurring among the Fortune Global 500 firms during the years 2000 to 2006. Cashman, Gillan and Whitby investigate the labor market for corporate directors to better understand which director attributes are relevant for board selection. Baulkaran, Amoako-Adu and Smith analyze the link between the valuation discount of dual class companies and the channels through which private benefits can be extracted. Aggarwal examines ETFs and notes that the additional risks, complexity, and reduced transparency of these funds have attracted heightened attention by regulators.

Volume 17 of Advances in Financial Economics, entitled "Corporate Governance in the US and Global Settings" will provide further insights into corporate governance in the US & global economic and financial environment by publishing international, within-country and cross-country comparative studies. The volume will be edited by the series editors, Kose John, New York University, Anil Makhija, Ohio State University, and Stephen P. Ferris, University of Missouri.

Advances in Financial Economics, volume 18, will present research on corporate governance both in the US and globally. Papers will deal with the role played by boards of directors, internal organization design and governance mechanisms, franchise agreements, the effect of regulation and policy, the market for corporate control, and strategic alliances. The volume will aim at providing a deeper understanding of corporate governance practices, trends, innovations and challenges using international data.

Advances in Financial Economics Volume 19 deals with International Corporate Governance, particularly the role played by boards of directors, internal organization design and governance mechanisms, franchise agreements, the effect of regulation and policy, the market for corporate control, and strategic alliances.

Advances in Financial Economics volume 20 deals with International Corporate Governance, particularly the role played by boards of directors, internal organization design and governance mechanisms, franchise agreements, the effect of regulation and policy, the market for corporate control, and strategic alliances.

Empirical Research in Banking and Corporate Finance is the 21st volume of Advances in Financial Economics and deals with International Corporate Governance. Explored in detail are the role of corporate cultures, social responsibility, stock liquidity, securitization, leveraged buyouts and the cost of private debt.