Convergence and Persistence in Corporate Law and Governance

2018 ◽  
Author(s):  
Jeffrey N. Gordon
Keyword(s):  
Corporate Governance ◽  
Initial Public Offerings ◽  
Capital Market ◽  
Emerging Market ◽  
Corporate Law ◽  
Stock Exchanges ◽  
The European Union ◽  
Public Offerings ◽  
End Of History ◽  
Value Model

This chapter discusses the question of “convergence or persistence” in corporate law and governance. It first considers efforts to measure convergence directly by focusing on the evolution of law-on-the-books governance provisions before analyzing capital market evidence on convergence, with particular emphasis on capital market indicators such as the decline in “cross-listings” onto US stock exchanges by firms from jurisdictions with weaker investor protection and the increase in initial public offerings (IPOs) on emerging market stock markets. The chapter proceeds by reviewing evidence of divergence, especially “divergence within convergence,” and the failure of the European Union to produce more convergent corporate governance. It also looks at the “End of History” debate over whether corporate governance has converged on a “shareholder value” model and concludes by asking whether “stability” will become a general objective of corporate governance convergence.

scholarly journals Brazilian initial public offerings, underwriters, and premium corporate governance segments listing

2015 ◽  
Vol 13 (1) ◽  
pp. 1410-1418
Author(s):  
Vinicio de Souza e Almeid ◽  
Ricardo Pereira Câmara Leal
Keyword(s):  
Corporate Governance ◽  
Initial Public Offerings ◽  
Capital Market ◽  
Conflict Of Interest ◽  
Price Discovery ◽  
Scale Effects ◽  
Public Offerings ◽  
Governance Practices ◽  
Underwriter Reputation ◽  
Second Tier

We examined 89 offers in the most recent Brazilian IPO wave between 2004 and 2007, all listed in premium segments of the exchange that demand better corporate governance practices. Two non-US underwriters dominated the market, often acting as co-leaders and rarely as second-tier underwriters. Twenty-eight percent of issuers received pre-IPO loans from underwriters, which may constitute a conflict of interest. Syndicate membership increased with offer size, suggesting that distribution risk was relevant. Underwriter compensation increased with offer size, but percentage fees suggested scale effects. There was no evidence in favor of the relevance of underwriter reputation, certification, and price discovery roles. The study brings a portrait of underwriter relationships in this unique period of the Brazilian capital market.

Initial Public Off erings’ Process at the World's Largest Stock Exchanges in 2001–2012

2015 ◽  
Vol 2015 (5) ◽  
pp. 104-128
Author(s):  
Ekaterina Musikhina
Keyword(s):  
Time Series ◽  
Initial Public Offerings ◽  
Activity Concentration ◽  
Emerging Market ◽  
Equity Markets ◽  
Two Dimensions ◽  
Stock Exchanges ◽  
Public Offerings ◽  
The World ◽  
Leading Position

This article is investigating the initial public offerings (IPO) activity at world’s largest stock exchanges in 2001–2012. The main goal of the article is to determine the main trends of the IPO process at the world largest Stock Exchanges in 2001—2012. To achieve this goal the the author examines world and regional exchange centers of IPO-activity concentration and dentifies the factors determining the leading position of particular stock exchanges in various countries and regions in different periods of time. The autor coliects and analyses data from annual «IPO Watch Europe» reports provided by PwC Company in 2001—2012. The obtained time-series gives the opportunity to examine the variations of IPO-activity at different world Stock Exchanges along two dimensions: the overall volume and value of IPO deals at various Stock Exchanges. The analysis proves that the IPO-activity was mostly concentrated at European, US and the Greater China stock exchanges during the period under con sideration. The study reveals the shift of the world IPO-activity to Asian equity markets, with high IPO-activity indicators reported in emerging market econo mies. Brazilian, Saudi Arabian, Polish stock exchanges demonstrate the highest offerings indicators in this group. Thus, they are expected to become the new re gional centers of IPO-activity in future. In order to maintain or increase the current IPO-activity indicators ex-leaders had to resort to the consolidation of existing facilities throng M&A processes.

The Oxford Handbook of IPOs

2018 ◽  
Keyword(s):  
United States ◽  
Initial Public Offerings ◽  
Financial Regulation ◽  
Large Body ◽  
Public Information ◽  
The United States ◽  
Minimum Size ◽  
Stock Exchanges ◽  
Public Offerings ◽  
Firm’S Life Cycle

Firms generally begin as privately owned entities. When they grow large enough, the decision to go public and its consequences are among the most crucial times in a firm’s life cycle. The first time a firm is a reporting issuer gives rise to tremendous responsibilities about disclosing public information and accountability to a wide array of retail shareholders and institutional investors. Initial public offerings (IPOs) offer tremendous opportunities to raise capital. The economic and legal landscape for IPOs has been rapidly evolving across countries. There have been fewer IPOs in the United States in the aftermath of the 2007–2009 financial crisis and associated regulatory reforms that began in 2002. In 1980–2000, an average of 310 firms went public every year, while in 2001–2014 an average of 110 firms went public every year. At the same time, there are so many firms that seek an IPO in China that there has been a massive waiting list of hundreds of firms in recent years. Some countries are promoting small junior stock exchanges to go public early, and even crowdfunding to avoid any prospectus disclosure. Financial regulation of analysts and investment banks has been evolving in ways that drastically impact the economics of going public—in some countries, such as the United States, drastically increasing the minimum size of a company before it can expect to go public. This Handbook not only systematically and comprehensively consolidates a large body of literature on IPOs, but provides a foundation for future debates and inquiry.

scholarly journals Short-run price performance of IPOs and corporate governance practices: Evidence from a frontier market

2018 ◽  
Vol 2 (1) ◽  
pp. 34-42 ◽  
Author(s):  
SMRK Samarakoon ◽  
KLW Perera
Keyword(s):  
Corporate Governance ◽  
Initial Public Offerings ◽  
Negative Impact ◽  
Stock Exchange ◽  
Sri Lankan ◽  
Governance System ◽  
Public Offerings ◽  
Price Performance ◽  
Governance Practices ◽  
Short Run

The short-run price performance of Initial Public Offerings (IPOs) indicates that the prices are often underpriced which is widely documented as a universal phenomenon. Corporate governance refers to the set of systems, principles and processes by which a company is governed. Establishing good corporate governance system in an IPO company makes good decisions which attract more outside investors. Therefore, this study examines whether there is any impact of corporate governance practices on short-run price performance of Sri Lankan IPOs. Study examined 44 fixed price IPOs which were listed on the Colombo Stock Exchange (CSE) during the period of 2003 – January to 2015- December. The study found that Sri Lankan IPOs underprice by 30% on AR, which is statistically significant at 5% level. Further, it found that block holder ownership (ownership concentration), CEO duality and existence of the non-executive directors in the board are positively related to the short-run underpricing, which are statistically significant at 5%. But, the board size has a significant negative impact on underpricing. These relationships are in line with the international literature which confirms that the corporate governance practices have significant impact on short-run price performance of IPOs in Sri Lanka. These findings also support the agency and signaling theories.

scholarly journals The two-tier board system and underpricing of initial public offerings: Evidence from Austria

2014 ◽  
Vol 12 (1) ◽  
pp. 352-362
Author(s):  
Lalith P. Samarakoon ◽  
Palani-Rajan Kadapakkam
Keyword(s):  
Corporate Governance ◽  
Agency Theory ◽  
Initial Public Offerings ◽  
Stock Exchange ◽  
Supervisory Board ◽  
Board Structure ◽  
Ipo Underpricing ◽  
Public Offerings ◽  
Management Board ◽  
Board System

We study the relation between initial IPO underpricing and two-tier board structure in the Vienna Stock Exchange of Austria, where a two-tier board is mandatory for listed companies. The board ratio, defined as the size of the supervisory board to the management board, is used to capture the effect of two-tiered board on underpricing. The results show that the board ratio is negatively related with underpricing, consistent with the agency theory which predicts that more effective monitoring implied in a relatively larger supervisory board will lead to lower agency costs, and thus lower underpricing. The results are robust to the inclusion of control variables and suggest that firms seeking to raise external capital will be helped by adopting strong corporate governance standards.

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