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Title: | Stock co-movement and governance bundles: Does the quality of national governance moderate this relationship? |
Authors: | Egwuonwu, A Lodh, S Nandy, M |
Keywords: | board monitoring;governance bundle;national governance quality;incentive alignment;stock co‐movement |
Issue Date: | 5-Feb-2021 |
Publisher: | Wiley |
Citation: | Egwuonwu, A., Lodh, S. and Nandy, M. (2021) 'Stock co‐movement and governance bundles: Does the quality of national governance moderate this relationship?', International Journal of Finance and Economics, 28 (3), pp. 2530-2548. doi: 10.1002/ijfe.2548. |
Abstract: | In this study, we examine if corporate governance, as a bundle, can better explain stock co-movement. To test the implication of governance bundles on stock co-movement, we consider a monitoring and incentive alignment bundle. Using 2,659 firm-year observations from 321 firms listed on the S&P 500 from 2009 to 2017, we find that the governance mechanism bundle can enhance the ability of stock prices to integrate better firm-specific information, which reflects on stock co-movement. In addition, we find the existence of a complementary relationship between National Governance Quality and a firm's board monitoring. This also helps in explaining the puzzle of stock co-movement. The findings will extend the understanding about the co-movement-related literature mentioned in the corporate governance and corporate finance research. The findings are also helpful for decision makers and policy makers involved in the efficient controlling of stock co-movement. |
Description: | Data Availability Statement: The data that support the findings of this study are available from the corresponding author upon reasonable request. |
URI: | https://bura.brunel.ac.uk/handle/2438/22468 |
DOI: | https://doi.org/10.1002/ijfe.2548 |
ISSN: | 1076-9307 |
Appears in Collections: | Brunel Business School Research Papers |
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FullText.pdf | Copyright © 2021 John Wiley & Sons Ltd. All Rights Reserved. This is the peer reviewed version of the following article: Stock co-movement and governance bundles: 'Does the quality of national governance moderate this relationship?', which has been published in final form at https://doi.org/10.1002/ijfe.2548. This article may be used for non-commercial purposes in accordance with John Wiley & Sons Ltd's Terms and Conditions for Self-Archiving (see: https://authorservices.wiley.com/author-resources/Journal-Authors/licensing/self-archiving.html). | 500.09 kB | Adobe PDF | View/Open |
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