Article 2, Volume 1 Issue 2:

Corporate governance and performance during plummeting and soaring financial markets

Author

Kurt A. Desender – (Universidad Carlos III)

Mónica Lopez Puertas-Lamy – (Universidad Carlos III)

Received November 10, 2014; accepted May 12, 2015.

Abstract

The objective of this study is to investigate the relationship between stock market performance and ownership structure during plummeting and soaring financial markets in a Continental-European setting. Our results demonstrate the importance of ownership concentration, the presence of multiple blockholders and the type of ownership to explain stock market performance in periods of stock market turbulence. In addition, we find that the results for extreme down markets are fundamentally different from the up-market results. While ownership concentration is valued positively during down market periods, it is valued negatively during up market periods. Furthermore, the presence of multiple blockholders only influences the stock price during down market periods. Finally, firms controlled by financial institutions lose less value during down markets, while firms controlled by non-founding families lose more value, compared to widely held firms, during down market periods. No significant relationship is found during up market periods.

El objetivo de este estudio es investigar la relación entre el rendimiento del mercado de valores y la estructura de propiedad durante la caída y el alza de los mercados financieros en un entorno continental europeo. Nuestros resultados demuestran la importancia de la concentración de la propiedad, la presencia de múltiples propietarios de bloques y el tipo de propiedad para explicar el desempeño del mercado de valores en períodos de turbulencia del mercado de valores. Además, descubrimos que los resultados para los mercados extremadamente bajos son fundamentalmente diferentes de los resultados del mercado ascendente. Si bien la concentración de propiedad se valora positivamente durante los períodos de baja del mercado, se valora negativamente durante los períodos de subida del mercado. Además, la presencia de múltiples propietarios de bloques solo influye en el precio de las acciones durante los períodos de baja del mercado. Finalmente, las empresas controladas por las instituciones financieras pierden menos valor durante los mercados bajistas, mientras que las empresas controladas por familias no fundadoras pierden más valor, en comparación con las empresas de amplia participación, durante los períodos de baja del mercado. No se encuentra una relación significativa durante los períodos de subida del mercado.

Citation

Desender, K. A., & LópezPuertas-Lamy, M. (2015). Corporate Governance and Performance During Plummeting and Soaring Financial Markets. European Accounting and Management Review2(1).

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