Well-constructed, country-specific “corporate governance indices” can predict higher firm values in emerging markets. However, there is little credible research on which aspects of governance drive that overall relationship. We study that...Read more
We examine how creditor protection affects firms with different levels of owners’ and managers’ personal costs of bankruptcy. Theoretically, we show that firms with high personal costs of bankruptcy borrow and invest more under a more debtor-...Read more
We discuss empirical challenges in multicountry studies of the effects of firm-level corporate governance on firm value, focusing on emerging markets. We assess the severe data, “construct validity,” and endogeneity issues in these studies,...Read more
Outside directors and audit committees are widely considered to be central elements of good corporate governance. We use a 1999 Korean law as an exogenous shock to assess how board structure affects firm market value. The law mandates 50% outside...Read more
Prior work in emerging markets provides evidence that better corporate governance predicts higher market value, but very little on the specific channels through which governance increases value. We provide evidence, from a natural experiment in...Read more
Reforms to Korean corporate and securities law carried out in the wake of the 1997-1998 East Asian financial crisis included a mandate that boards include a minimum number of outside directors and facilitation of shareholder lawsuits against...Read more
In a companion paper, we report evidence that a broad corporate governance index predicts higher share prices for Korean firms. Bernard Black, Hasung Jang and Woochan Kim, Does Corporate Governance Affect Firms' Market Values? Evidence from Korea...Read more
We report strong OLS and instrumental variable evidence that an overall corporate governance index is an important and likely causal factor in explaining the market value of Korean public companies. We construct a corporate governance...Read more
Exploiting a bankruptcy reform in Korea, I examine how managers’ personal bankruptcy costs affect firms’ financing and investment decisions.
