The Corporate Governance Role of the Media Evidence from Russia
➤ Gửi thông báo lỗi ⚠️ Báo cáo tài liệu vi phạmNội dung chi tiết: The Corporate Governance Role of the Media Evidence from Russia
The Corporate Governance Role of the Media Evidence from Russia
The Corporate Governance Role of the Media: Evidence from RussiaAlexander DyckUniversity of TorontoNatalya VolchkovaNew Economic School and CEF1R andL The Corporate Governance Role of the Media Evidence from RussiaLuigi ZingalesUniversity of Chicago, NBER, and CEPRAbstractWe study the effect of media coverage on corporate governance by focusing on Russia in the period 1999-2002. This setting offers four ideal conditions for such a study: plenty of corporate governance violations, no alternative mechanisms to The Corporate Governance Role of the Media Evidence from Russiaaddress them, the presence of an investment fund (the Hermitage) that actively lobbies the international press to shame companies perpetrating those vThe Corporate Governance Role of the Media Evidence from Russia
iolations, and firms relatively unsophisticated in interacting with the foreign press. We find that Hermitage’s lobbying is effective in increasing thThe Corporate Governance Role of the Media: Evidence from RussiaAlexander DyckUniversity of TorontoNatalya VolchkovaNew Economic School and CEF1R andL The Corporate Governance Role of the Media Evidence from Russiaility that a corporate governance violation is reversed: one more article increases the probability of reversal by 5 percentage points. This effect is present even when we instrument coverage with an exogenous determinant, i.e. the Hennitage’s portfolio composition at the beginning of the period. Th The Corporate Governance Role of the Media Evidence from Russiae Hermitage’s strategy seems to work in part by impacting Russian companies’ reputation abroad and in part by forcing regulators into action.* AlexandThe Corporate Governance Role of the Media Evidence from Russia
er Dyck thanks (he Gamma Foundation, the Division of Research. Harvard Business School, and the Rotman School of Management for financial support. LuiThe Corporate Governance Role of the Media: Evidence from RussiaAlexander DyckUniversity of TorontoNatalya VolchkovaNew Economic School and CEF1R andL The Corporate Governance Role of the Media Evidence from Russiaeatriz Armendariz. Stefano della Vigna. Andrei Shleifer. Andrei Simonov. Ekaterina Zhuravskaya, and participants and seminars at Dartmouth, Harvard. Stockholm School of Economics and the NBER for very useful comments. We thank Mehmet Beceren and Victor Xin for their research assistance.https://khoth The Corporate Governance Role of the Media Evidence from Russiauvien.cori!In recent years, hedge funds have emerged as some of the most powerful players in corporate governance worldwide. From the dismissal of DeuThe Corporate Governance Role of the Media Evidence from Russia
tsche Boerse’s CEO Seifert to McDonalds spin-off of major assets in an IPO, hedge funds have played a crucial role. The Uh// Street Journal labeled thThe Corporate Governance Role of the Media: Evidence from RussiaAlexander DyckUniversity of TorontoNatalya VolchkovaNew Economic School and CEF1R andL The Corporate Governance Role of the Media Evidence from Russiais to focus public attention on an underperforming company and shame the CEO to either resign or change policy (Kahan and Rock, 2006).Il is hard to tell, however, whether this public relations campaign is just a smokescreen for more important maneuvers that take place behind the scene or is a crucia The Corporate Governance Role of the Media Evidence from Russial ingredient of their battle. Can hedge funds (or shareholders in general) increase the level of coverage received by certain news'companies? And if sThe Corporate Governance Role of the Media Evidence from Russia
o, does this coverage have any effect on corporate governance outcomes? These questions are hard to address using U.S. data. Most hedge funds trade inThe Corporate Governance Role of the Media: Evidence from RussiaAlexander DyckUniversity of TorontoNatalya VolchkovaNew Economic School and CEF1R andL The Corporate Governance Role of the Media Evidence from Russiawhether they are indeed an actor of change. Hedge funds in the United States (and in most of Europe) also have access to an array of options to address bad corporate governance (from shareholder’s suits to calling an extraordinary general meeting). So it is hard to tell whether they succeed because The Corporate Governance Role of the Media Evidence from Russiaof their public relations campaign or because of the power of their legal rights. In addition, the impact of their media campaign can be reduced by coThe Corporate Governance Role of the Media Evidence from Russia
untervailing public relations effort exerted by firms.To overcome these problems we study shareholders* ability to influence coverage and the impact oThe Corporate Governance Role of the Media: Evidence from RussiaAlexander DyckUniversity of TorontoNatalya VolchkovaNew Economic School and CEF1R andL The Corporate Governance Role of the Media Evidence from Russia, during the late 1990s, coiporate governance violations in Russia were very extreme, very' common, and very visible, providing a wide field of inquiry. Second, in Russia, the standard mechanisms to readdress these violations were either non-existent or completely ineffective (for example, courts we The Corporate Governance Role of the Media Evidence from Russiare easily corruptible), allowing US to identify whether media have an independent effect on outcomes.1 Alan Murray “Hedge Funds Are Neu- Sheriffs of BThe Corporate Governance Role of the Media Evidence from Russia
oardroom,’’ Ub/J Stneer Journal, 14 December 2005, pg A2.2Third, and most important, in Russia, (here exists an investment fund (the Hermitage Fund), The Corporate Governance Role of the Media: Evidence from RussiaAlexander DyckUniversity of TorontoNatalya VolchkovaNew Economic School and CEF1R andL The Corporate Governance Role of the Media Evidence from Russiaasic approach is to thoroughly research and understand where the corporate malfeasance is taking place and then go to great pains to simplify die story so the average person can understand what is going on......We then share die stories widi the press. By doing so.we want to inflict real consequence The Corporate Governance Role of the Media Evidence from Russias - business, reputational and financial” (Dyck, 2002). Since die Hermitage fund spends resources only when it has money at stake, we can use the HermThe Corporate Governance Role of the Media Evidence from Russia
itage's portfolio composition as an instrument lor news coverage.Fourth, Russian managers were just learning about the impact of the press and were unThe Corporate Governance Role of the Media: Evidence from RussiaAlexander DyckUniversity of TorontoNatalya VolchkovaNew Economic School and CEF1R andL The Corporate Governance Role of the Media Evidence from Russiae time of the Russian default), when the level of corporate governance violations exploded. This regime shift makes it unlikely that the pre-Russia default stake of the Hennitage (which we use as an instrument) was chosen with a media strategy in mind, eliminating the risk of reverse causality.Besid The Corporate Governance Role of the Media Evidence from Russiaes its role as an ideal laboratory setting, the study of alternative mechanisms of corporate governance in an emerging market like Russia is of indepeThe Corporate Governance Role of the Media Evidence from Russia
ndent interest. The fraction of pension money invested in emerging markets with unformed legal systems (like China) is rapidly growing. But Western inThe Corporate Governance Role of the Media: Evidence from RussiaAlexander DyckUniversity of TorontoNatalya VolchkovaNew Economic School and CEF1R andL The Corporate Governance Role of the Media Evidence from Russiady of an effective alternative corporate governance mechanism can be of great practical interest.To identify d sample of |M)lenlial corporal? governance violations we exploit the fact that a prominent Russian investment bank. Troika Dialog, produc ed a weekly publication, between 1998 and 2002, that The Corporate Governance Role of the Media Evidence from Russia highlighted all the corporate actions that, in their view, have the potential to severely impact outside investors’ rights. This definition of potentThe Corporate Governance Role of the Media Evidence from Russia
ial violation does not necessarily imply that any Russian law was infringed.*when discussing governance violations we focus on the distributional impaThe Corporate Governance Role of the Media: Evidence from RussiaAlexander DyckUniversity of TorontoNatalya VolchkovaNew Economic School and CEF1R andL The Corporate Governance Role of the Media Evidence from Russiave a positive efficiency effect, because the consolidation of cash flow rights in one hand can have positive incentive effects as aigued in rhe Russian case by Shleifer (2005), and Guriev and Rachinsky (2005).3How to judge, for instance, Tomskneft’s dilutive equity issue in 1999? The issue was appro The Corporate Governance Role of the Media Evidence from Russiaved by shareholders present at the meeting. But very few were able to be present because the day of the meeting the company announced that the venue hThe Corporate Governance Role of the Media Evidence from Russia
ad been transferred to a new distant location that shareholders couldn’t possibly reach in time to vote on the proposal.We refine this list by eliminaThe Corporate Governance Role of the Media: Evidence from RussiaAlexander DyckUniversity of TorontoNatalya VolchkovaNew Economic School and CEF1R andL The Corporate Governance Role of the Media Evidence from Russia whether they were stopped or somehow readdressed.Not surprisingly, we find that the magnitude of the violation (which we proxy by the potential loss caused by the announced decision) increases the extent it is covered in the Anglo-American media. We also find that, controlling for the severity of t The Corporate Governance Role of the Media Evidence from Russiahe violation, companies receiving more coverage in normal periods (and thus more newsworthy) command more attention. Even controlling for these factorThe Corporate Governance Role of the Media Evidence from Russia
s, however, we find that the presence of the Hermitage fund among its shareholders increases the amount of coverage a corporate governance violation rThe Corporate Governance Role of the Media: Evidence from RussiaAlexander DyckUniversity of TorontoNatalya VolchkovaNew Economic School and CEF1R andL The Corporate Governance Role of the Media Evidence from Russian we use the Hermitage Fund’s stake in companies at the beginning of the period (end of 1998).We then test whether news coverage in the Russian and prominent English language press surrounding and following the revelation of this potential violation is correlated with the eventual outcome. We find t The Corporate Governance Role of the Media Evidence from Russiahat the bad corporate governance decision is reverted following an increase in coverage of the event in Anglo-American newspapers. More importantly, tThe Corporate Governance Role of the Media Evidence from Russia
he probability of this reversal is significantly affected by media coverage, even after controlling for other potential determinants of the outcome, sGọi ngay
Chat zalo
Facebook