Indices
Working Paper
The Promise and Peril of Corporate Governance Indices
Financial economists and commercial providers of governance services have in recent years created measures of the quality of firms' corporate governance which collapse into a single number (a governance index or rating) the multiple dimensions of...Read more
Corporate Governance Indices and Construct Validity
We conduct an exploratory analysis of how researchers can address the issue of ?construct validity?, which poses a major challenge to all studies of the effect of corporate governance on firm performance. Many corporate governance studies rely on...Read more
Governance through Shame and Aspiration: Index Creation and Corporate Behavior
After decades of both de-prioritizing shareholders' economic interests and low corporate profitability, Japan introduced the JPX400 in 2014. The index highlighted the country's "best-run" companies by annually selecting the 400 most profitable...Read more
Passive Investors
The increasing percentage of the modern capital markets owned by passive investors – index funds and ETFs – has received extensive media and academic attention. This growing ownership concentration as well as the potential power of passive...Read more
Video
Presentation
We conduct an exploratory analysis of how researchers can address the issue of “construct validity”, which poses a major challenge to all studies of the effect of corporate governance on firm performance. Many corporate governance studies rely on aggregate governance “indices” to measure underlying, unobserved governance. But we are not confident that we know how to build these indices – often we are unsure both as to what is “good” governance, and how one can proxy for this vague concept using observable measures. These are construct validity questions.
September 22 2018