In new empirical research, Alma Cohen, Charles C.Y. Wang, and I show how stock markets have learned to price anti-takeover provisions. This learning by markets has important implications for both managements of publicly traded companies and their investors… while investors can no longer profit by basing their trading decisions on standard anti-takeover provisions, our findings […]
Tag Archives | Wang
Learning and the Disappearing Association Between Governance and Returns
James McRitchie, 05/04/2010 ,
Study by Lucian A. Bebchuk, Alma Cohen, and Charles C.Y. Wang finds the governance provisions (G-Index) used by Gompers, Ishii, and Metrick (2003) that showed abnormal returns during the 1991-1999 period was no longer associated with abnormal returns during the period of 2000-2008. Consistent with the learning hypothesis, they document that (i) attention to corporate […]