Corporate governance and firm value during a financial crisis

Research output: Journal Publications and ReviewsRGC 21 - Publication in refereed journalpeer-review

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Original languageEnglish
Pages (from-to)459-481
Journal / PublicationReview of Quantitative Finance and Accounting
Issue number4
Publication statusPublished - May 2010


The main purpose of this paper is to evaluate the effects of management ownership and other corporate governance variables on Hong Kong firms' stock performance following the onset of the Asian Financial Crisis (1997-98). Our results show that Hong Kong firms with a more concentrated management (executive board) ownership displayed better capital market performance during the 13-month period of the Crisis. We also find that firms with more equity ownership by non-executive directors, and in which the positions of CEO and board chairperson were occupied by the same individual experienced a smaller stock price decline. Our findings are consistent with the notion that there is a greater alignment of insiders with outside owners, rather than the expropriation by insiders who have the opportunity to divert value, for firms with higher levels of management ownership during an unexpected capital market crisis. © Springer Science+Business Media, LLC 2009.

Research Area(s)

  • Corporate governance, Financial crisis, Firm performance, Hong Kong, Management ownership