Article | Finance area | Year 2011 | |
Adverse Selection And Corporate Governanceby Charlie Charoenwong; David K. Ding; Vasan Siraprapasiri | |
International Review of Economics & Finance 20(3), p.406-420 |
AbstractThis paper examines the impact of corporate governance on the adverse selection component of the bid-ask spread of stocks listed on the Singapore Exchange. These companies have been identified by Credit Lyonnais Securities Asia (CSLA) with the highest level of corporate governance among 25 emerging markets. We measure corporate governance by several criteria: discipline, transparency, independence, accountability, responsibilities, fairness, and social awareness. The results show that corporate governance has an inverse relationship with adverse selection. However, only the transparency dimension exhibits a significant inverse relationship with adverse selection. In addition, Government-Linked Companies (GLCs) are shown to have a smaller adverse selection component than non-GLCs.
Keywords: corporate governance Comments: Indexed in SCOPUS |
Note: | Received 12 November 2010.
Available online 25 November 2010 |
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