Earticle

초록

영어

We use agency theory to explore how analyst coverage is influenced by managerial entrenchment associated with classified (or staggered) boards. The empirical evidence, based on nearly 2,000 firms across 15 years, suggests that firms with classified boards attract significantly larger analyst following. To cloak their efforts to expropriate from shareholders, opportunistic entrenched managers are motivated to disclose less information to outsiders. The resulting opaque information environment makes the information reported by analysts more useful to investors, hence more demand for analyst coverage. Our results show that the impact of staggered boards on analyst coverage exceeds, by three to six times, the effects of other corporate governance provisions. We also document the beneficial role of analyst coverage in improving firm value and reducing the costs of debt. Our results are consistent with the notion that analysts, as information intermediaries, provide oversight over management and thus help alleviate agency conflicts. The positive effect of analyst coverage, however, is severely reduced when the firm has a staggered board in place.

목차

Abstract
 I. Introduction
 II. Background and Previous Literature
  A. Staggered Boards and Managerial Entrenchment
  B. Staggered Boards vs. Other Governance Provisions
  C. Analyst Following: A Brief Literature Review
 III. Hypothesis Development
  A. The Outcome Hypothesis
  B. The Substitution Hypothesis
  C. The Signaling Hypothesis
 IV. Sample Formation and Data Description
  A. Sample Selection
  B. Descriptive Statistics
 V. Empirical Results
  A. Univariate Analysis
  B. Regression Analysis
  C. Possible Endogeneity: Reverse Causality
  D. Possible Endogeneity: Unobservable Firm Characteristics.
  E. Possible Industry Effects
  F. Further evidence on the Signaling Hypothesis
  G. Staggered boards and information asymmetry
  H. Firm Value, Analyst Coverage, and Staggered Boards
 VI. Concluding Remarks
 References
 Table

키워드

저자

• Pornsit Jiraporn [ Great Valley School of Graduate Professional Studies Pennsylvania State University ]
• Young Sang Kim [ College of Business Northern Kentucky University & Kookmin University ] Corresponding author

참고문헌

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간행물

표지보기 관심저널 등록

• 간행물명

  한국재무학회 학술대회

• 간기

  부정기

• 수록기간

  2006~2024

• 십진분류

  KDC 325 DDC 330