Essays on global corporate governance issues.

다국어 초록 (Multilingual Abstract)

My dissertation studies the issues on corporate governance in a global context. In the first chapter, I study a well-documented but little understood phenomenon that foreign acquirers target only well-performing in emerging markets. To explain this phenomenon, I develop a law and finance model, in which I argue that controlling shareholders of acquiring firms from strong-investor protection (IP) countries consume fewer private benefits and, hence, value control premia lower than does a controlling shareholder in a weak-IP country. Within a weak-IP country, controlling shareholders of well-performing firms have less incentive to consume private benefits because of greater opportunity costs of foregoing profitable investment opportunities. Thus, these firms demand lower control premia, making them more palatable to a foreign acquirer from a strong-IP country.
These hypotheses are supported by data on cross-border acquisition bids. They reveal that foreign acquirers target only well-performing films in weak-IP countries, but not in strong-IP countries. I also conduct a difference-in-difference estimation using corporate governance reforms (CGRs) undertaken by 29 countries since 1999. I find that the cherry picking tendency declines when target countries undertake CGRs, narrowing the gap in IP between acquirer and target countries. Conversely, the cherry picking tendency increases when acquirers' home countries undertake CGRs, enlarging the IP gap.
These findings imply that CGRs have important impacts on underperforming firms' accessibility to foreign investors; however, whether the impact is favorable or unfavorable depends on which country undertakes the reform.
The second chapter is based on a paper co-authored with E. Han Kim. We find a hump shaped relation between Tobin's Q and CEO share ownership, but only when external pressure for good governance is weak, where the pressure is measured by product market competition and institutional ownership concentration. When external governance is strong, CEO share ownership is unrelated to Tobin's Q. These results are robust to firm or CEO-firm pair fixed effects, alternative definitions of key variables, different statistical properties between strong and weak external governance regimes, founder effects, reverse causality, and other endogeneity issues. The hump shaped relation appears to be a manifestation of some CEOs capturing incentive contracts under weak external governance, while no relation under strong external governance is consistent with the contracting view that CEO ownership is a component of equilibrium contracts.