- Negative market adjusted abnormal returns Financial / ownership and during announcement of RPTs as well as year corporate governance data Relation RPTs and shareholder after, so no adjustments ex ante, except firms Cheung et al. of 603 Hong Kong listed value (measured by market Regression with Chinese owners; (2006) companies and 375 filings adjusted abnormal returns MAAR) - Sales/acquisition of assets equity concerning RPTs for the relationships cash payments and trading years 1998 till 2000 relations most harmful; - 1997-2000: investors devaluate earnings; - 2001-2003: investors devaluate don’t Value relevance of RPT disclosure Top 100 Chinese listed earnings; Ge et al. (impact of RPT disclosures on firm companies, periods Regression So, value relevance of disclosed info (2010) value) and 2001-2003 increased after introduction of new RPT fair value measurement regulation. Figure 3: Summarizing table empirical research investor protection Authors Object of study Sample Methodology Outcome - Exploring differences among - Investors have the best protection in countries in legal protection of common law countries, the worst protection in La Porta et investors 49 countries Regression French civil law countries; al. (1998) - Effects of those differences in legal - Negative correlation between investor protection on firm ownership protection and concentration of ownership. High investor protection results in more Possibilities of firms among countries La Porta et developed capital markets (measured by # of with different level of legal protection 49 countries Regression al. (1997) # of domestic listed firms, and total IPO’s, to raise debt and equity amount of private and bond borrowings). - Negative relation between weak investor Relation investor protection, cash La Porta et 539 firms of 27 wealthy protection (risk of expropriation) and firm flow rights of main shareholder and Regression al. (2002) countries (including NL) value; firm value (Tobin’s Q) - Positive relation between cash flow rights
Cheung et al. (2006) Relation RPTs and shareholder value (measured by market adjusted abnormal returns MAAR) Financial / ownership and corporate governance data of 603 Hong Kong listed companies and 375 filings concerning RPTs for the years 1998 till 2000 Regression - Negative market adjusted abnormal returns during announcement of RPTs as well as year after, so no adjustments ex ante, except firms with Chinese owners; - Sales/acquisition of assets equity relationships cash payments and trading relations most harmful; Ge et al. (2010) Value relevance of RPT disclosure (impact of RPT disclosures on firm value) Top 100 Chinese listed companies, periods and 2001-2003 Regression - 1997-2000: investors devaluate earnings; - 2001-2003: investors don’t devaluate earnings; So, value relevance of disclosed info increased after introduction of new RPT fair value measurement regulation. Figure 3: Summarizing table empirical research investor protection Authors Object of study Sample Methodology Outcome La Porta et al. (1998) - Exploring differences among countries in legal protection of investors - Effects of those differences in legal protection on firm ownership 49 countries Regression - Investors have the best protection in common law countries, the worst protection in French civil law countries; - Negative correlation between investor protection and concentration of ownership. La Porta et al. (1997) Possibilities of firms among countries with different level of legal protection to raise debt and equity 49 countries Regression High investor protection results in more developed capital markets (measured by # of IPO’s, # of domestic listed firms, and total amount of private and bond borrowings). La Porta et al. (2002) Relation investor protection, cash flow rights of main shareholder and firm value (Tobin’s Q) 539 firms of 27 wealthy countries (including NL) Regression - Negative relation between weak investor protection (risk of expropriation) and firm value; - Positive relation between cash flow rights