Governance Mechanisms and Equity Prices (.pdf)
Internal and external monitoring have a strong complementary (synergistic) effect. That is the finding of Cremers and Nair who show that firms with both strong internal as well as external controls tend to outperform firms without the strong controls. To test this, the authors construct various portfolios and find that those firms who measure high on both categories outperform others in the sample. … [ Read more ]
Content: Article | Authors: K.J. Martijn Cremers, Vinay B. Nair | Source: Social Science Research Network (SSRN) | Subjects: Finance, Industry Specific | Industry: Investment Banking