Anti-Misconduct Policies, Corporate Governance and Capital Market Responses: International Evidence

Abstract

Using a sample of 5,486 observations from 25 countries between 2009 and 2013, we investigate the signaling effects of anti-misconduct policies on market valuation, and address the roles played by internal corporate governance mechanisms and external institutional environments. The results show that effective corporate governance mechanisms lead to higher-quality anti-misconduct policies. Furthermore, we find that although anti-misconduct policies alone do not affect market valuation in general, they do improve market valuation in countries with stronger legal and regulatory environments.

Keywords: Anti-misconduct Policies, Corporate Governance, Market Valuation