Details

Autor(en) / Beteiligte

• Drobetz, Wolfgang
• Schillhofer, Andreas
• Zimmermann, Heinz

Titel

Corporate Governance and Expected Stock Returns: Evidence from Germany

Ist Teil von

• European financial management : the journal of the European Financial Management Association, 2004-06, Vol.10 (2), p.267-293

Ort / Verlag

Oxford, UK, Malden, USA: Blackwell Publishing Ltd/Inc

Erscheinungsjahr

2004

Link zum Volltext

Quelle

EBSCOhost Business Source Ultimate

Beschreibungen/Notizen

• Recent empirical work shows evidence for higher valuation of firms in countries with a better legal environment. We investigate whether differences in the quality of firm‐level corporate governance also help to explain firm performance in a cross‐section of companies within a single jurisdiction. Constructing a broad corporate governance rating (CGR) for German public firms, we document a positive relationship between governance practices and firm valuation. There is also evidence that expected stock returns are negatively correlated with firm‐level corporate governance, if dividend yields are used as proxies for the cost of capital. An investment strategy that bought high‐CGR firms and shorted low‐CGR firms earned abnormal returns of around 12% on an annual basis during the sample period.