Corporate Governance Quality and a Firm's Adaptation to Competitive Threats
Identifikátory výsledku
Kód výsledku v IS VaVaI
<a href="https://www.isvavai.cz/riv?ss=detail&h=RIV%2F00216208%3A11230%2F17%3A10338031" target="_blank" >RIV/00216208:11230/17:10338031 - isvavai.cz</a>
Výsledek na webu
<a href="http://journal.fsv.cuni.cz/storage/1379_53_78_novak_final_issue_01_2017.pdf" target="_blank" >http://journal.fsv.cuni.cz/storage/1379_53_78_novak_final_issue_01_2017.pdf</a>
DOI - Digital Object Identifier
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Alternativní jazyky
Jazyk výsledku
angličtina
Název v původním jazyce
Corporate Governance Quality and a Firm's Adaptation to Competitive Threats
Popis výsledku v původním jazyce
This paper shows that regulatory improvements of corporate governance quality mandated by the Sarbanes-Oxley Act (SOX) are associated with a better ability of firms to adapt to product-market competitive threats. We contribute to prior research by using a novel approach of capturing the dynamic forward-looking aspect of competitive intensity based on linguistic comparison of firms' product descriptions in 10-K filings. Our measure of competitive intensity - the product market fluidity - captures the increase in verbal similarity of rival firms' product descriptions. Mandated changes to corporate governance are associated with lower future operating profitability and the profitability reductions are more pronounced in firms that experience lower competitive pressure before SOX implementation. However, firms facing competitive threats experience smaller declines in operating performance in the post-SOX period, which suggests that the improved corporate governance mechanisms make firms better able to accommodate competitive pressure. Using a novel approach to capture the dynamic aspect of competitive intensity the paper provides a new perspective on the 'substitution' hypothesis between corporate governance and product market competition.
Název v anglickém jazyce
Corporate Governance Quality and a Firm's Adaptation to Competitive Threats
Popis výsledku anglicky
This paper shows that regulatory improvements of corporate governance quality mandated by the Sarbanes-Oxley Act (SOX) are associated with a better ability of firms to adapt to product-market competitive threats. We contribute to prior research by using a novel approach of capturing the dynamic forward-looking aspect of competitive intensity based on linguistic comparison of firms' product descriptions in 10-K filings. Our measure of competitive intensity - the product market fluidity - captures the increase in verbal similarity of rival firms' product descriptions. Mandated changes to corporate governance are associated with lower future operating profitability and the profitability reductions are more pronounced in firms that experience lower competitive pressure before SOX implementation. However, firms facing competitive threats experience smaller declines in operating performance in the post-SOX period, which suggests that the improved corporate governance mechanisms make firms better able to accommodate competitive pressure. Using a novel approach to capture the dynamic aspect of competitive intensity the paper provides a new perspective on the 'substitution' hypothesis between corporate governance and product market competition.
Klasifikace
Druh
J<sub>imp</sub> - Článek v periodiku v databázi Web of Science
CEP obor
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OECD FORD obor
50201 - Economic Theory
Návaznosti výsledku
Projekt
<a href="/cs/project/GA15-13040S" target="_blank" >GA15-13040S: Kvalita účetních údajů, ziskovost obchodování manažerů a informační obsah ceny akcií</a><br>
Návaznosti
P - Projekt vyzkumu a vyvoje financovany z verejnych zdroju (s odkazem do CEP)
Ostatní
Rok uplatnění
2017
Kód důvěrnosti údajů
S - Úplné a pravdivé údaje o projektu nepodléhají ochraně podle zvláštních právních předpisů
Údaje specifické pro druh výsledku
Název periodika
Finance a úvěr
ISSN
0015-1920
e-ISSN
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Svazek periodika
67
Číslo periodika v rámci svazku
1
Stát vydavatele periodika
CZ - Česká republika
Počet stran výsledku
26
Strana od-do
53-78
Kód UT WoS článku
000396465600004
EID výsledku v databázi Scopus
2-s2.0-85014904252