2023 Global Corporate Governance Colloquium

2023 Global Corporate Governance Colloquium

  • 16 - 17 June 2023
  • •
  • Seoul, South Korea

Global Corporate Governance Colloquium 2023

 

Friday, 16 June 2023
08:45 - 18:00 KST (01:45 - 11:00 CEST)

Saturday, 17 June 2023
09:00 - 18:00 KST (02:00 - 11:00 CEST)

Location 
Seoul National University, Seoul, South Korea
 

ABOUT THE EVENT

The Global Corporate Governance Colloquia (GCGC) is a global initiative to bring together the best research in law, economics, and finance relating to corporate governance at a yearly conference held at 12 leading universities in the Americas, Asia and Europe. The 12 hosting institutions are:

Columbia University,  Harvard University,  Imperial College London,  National University of Singapore,  Peking University,  Seoul National University,  Stanford University,  Stockholm University,  University of Oxford,  University of Tokyo, Yale University and Goethe University Frankfurt (Leibniz Institute for Financial Research SAFE and DFG LawFin Center).

The aim of the conference series is to attract current research papers of the highest scholarly quality in the field of corporate governance. The conferences are primarily 'academic to academic' events with some participants from industry and the public sector including the practitioner partners of GCGC and other invited panelists. Japan Exchange Group (JPX) is a Practitioner Partner.

Note: This is an invitation-only event

 

                         

 

Information

Address:
Seoul National University, 1 Gwanak-ro, Seoul, South Korea
Contact:
Elaine McPartlan
European Corporate Governance Institute (ECGI)
admin@ecgi.org

Friday, 16 June 2023 08:45 KST (01:45 CEST)

08:15

Registration

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The Economics of Legal Uncertainty

Time:
09:00h

The Economics of Legal Uncertainty

Authors: Jiwon Lee, David Schoenherr, Jan Starmans

Abstract

In this paper, we study how legal uncertainty affects economic activity. We develop a parsimonious model with different types of legal uncertainty that reduce economic activity and that can be classified as idiosyncratic (i.e., diversifiable) or systematic (i.e., nondiversifiable). We test the model’s predictions using microlevel data on bankruptcy judges and corporate loans from Korea. Exploiting differences in judges’ debtor-friendliness combined with random judge assignment to restructuring cases and exogenous judge rotations in the judicial system, we compute time-varying court-level measures of debtor-friendliness and legal uncertainty. We first document that firms are more likely to file for restructuring in more debtor-friendly courts with lower legal uncertainty. We further show that legal uncertainty reduces the size of credit markets. The effects are driven by high-risk firms that are most sensitive to bankruptcy law. Examining interest rates, we find that credit supply is relatively more sensitive to systematic than to idiosyncratic sources of legal uncertainty relative to credit demand.

Speakers

Discussants

Conference Documents

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Outside Director Tenure Limit: The 2020 Korean Experiment

Time:
10:00h

Outside Director Tenure Limit: The 2020 Korean Experiment

Authors: Minjae Kim, Sojung Kim, Woochan Kim

Speakers

Discussants

11:00

Coffee break

11:30

Empower Women by Index Membership: Evidence from a Unique Experiment from Japan

Speakers:
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Empower Women by Index Membership: Evidence from a Unique Experiment from Japan

Time:
11:30h

Empower Women by Index Membership: Evidence from a Unique Experiment from Japan

Authors: Vikas Mehrotra, Lukas Roth, Yusuke Tsujimoto, Yupana Wiwattanakantang

Speakers

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Corporate Purpose in a Second-Best World

Time:
12:30h

Speakers

Discussants

13:30

Lunch Break

14:30

The Rise of Anti-Activist Poison Pills

Speakers:
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The Rise of Anti-Activist Poison Pills

Time:
14:30h

The Rise of Anti-Activist Poison Pills

Author: Ofer Eldar, Tanja Kirmse, Michael D. Wittry

Abstract
We provide the first systematic evidence of contractual innovation in the terms of poison pill plans. In response to the increase in hedge fund activism, pills have changed to include anti-activist provisions, such as low trigger thresholds and actingin-concert provisions. Using unique data on hedge fund views of SEC filings as a proxy for the threat of activists’ interventions, we show that hedge fund interest predicts pill adoptions. Moreover, the likelihood of a 13D filing declines after firms adopt “antiactivist” pills, suggesting that pills are effective in deterring activists. The results are particularly strong for “NOL” pills that, due to tax laws, have a five percent trigger.
Our analysis has implications for understanding the modern dynamics of market discipline of managers in public corporations and evaluating policies that regulate defensive tactics.

Speakers

Conference Documents

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Shareholder Rights and the Bargaining Structure in Control Transactions

Time:
15:30h

Shareholder Rights and the Bargaining Structure in Control Transactions

Authors: Ryan Bubb, Emiliano Catan, Holger Spamann

Abstract

When there are many shareholders in a firm, they face collective action problems. One problem is that acquirers can pursue divide-and-conquer strategies such as two-tiered front-loaded bids. The solution to this in the theoretical literature and in judicial practice is a centralized bargaining agent, such as the firm's management, or a shareholder vote. We show that these methods are of limited usefulness, however, in addressing the agency problem between shareholders and managers. In the relationship between shareholders and centralized bargaining agent, the shareholders receive take-it-or-leave-it offers, such that the agent captures all the surplus. This in turn hampers efficient ex ante financing: Some firms can raise sufficient funds only if (the threat of) judicial remedies provides them (an expectation of) some surplus. In realistically imperfect judicial systems, this induces trade-offs with court errors and litigation costs.

Speakers

Discussants

16:00

Coffee break

17:00

Panel Discussion

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Panel Discussion

Time:
17:00h
18:00

Day 1 Concludes

18:30

Reception & Dinner

Saturday, 17 June 2023 09:00 KST (02:00 CEST)

08:30

Registration

09:00

Regulation of the Governance of Financial Market Infrastructures

Speakers:
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Regulation of the Governance of Financial Market Infrastructures

Time:
09:00h

Speakers

10:00

Supply Chain Risk: Changes in Supplier Composition and Vertical Integration

Speakers:
Discussant:
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Supply Chain Risk: Changes in Supplier Composition and Vertical Integration

Time:
10:00h

Supply Chain Risk: Changes in Supplier Composition and Vertical Integration

Author: Nuri Ersahin, Mariassunta Giannetti, Ruidi Huang

Abstract

Using textual analysis of earnings conference calls, we quantify firms’ supply chain risk and its sources. Our proxy for supply chain risk exhibits large cross-sectional and time-series variation that aligns with reasonable priors and is unprecedently high during the Covid-19 pandemic. Controlling for the first moment of supply chain shocks, we find that firms that experience an increase in supply chain risk increase investment and establish relationships with closer and domestic suppliers and with suppliers that are industry leaders. In addition, firms that do not face financial constraints become more likely to engage in vertical mergers and acquisitions.

Speakers

Discussants

Conference Documents

11:00

Coffee break

Session 2

11:30

Governance Transparency and Firm Value: Evidence from Korean Chaebols

Speakers:
Discussant:
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Governance Transparency and Firm Value: Evidence from Korean Chaebols

Time:
11:30h

Governance Transparency and Firm Value: Evidence from Korean Chaebols

Authors: Akash Chattopadhyay, Sa-Pyung Sean Shin, Charles C.Y. Wang

 

Abstract

We examine Korean business groups' transition from opaque circular-shareholding structures to (relatively simple) pyramidal-shareholding structures between 2011 and 2018. When firms were removed from ownership loops, chaebol families' control and incentive conflicts in them were unaffected. Yet these firms' values declined, especially when controllers had greater incentive conflicts. We show these changes are explained by a resolution of uncertainty about controllers' incentives ("governance transparency'"), which increases earnings responsiveness and enables investors to update priors about the severity of agency issues across group firms. Combined, these two channels result in value increases for some group firms but declines in others.

Speakers

Discussants

Conference Documents

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Corporate Governance and Firm Value

Time:
12:30h

Corporate Governance and Firm Value

Authors: Emiliano Catan, Marcel Kahan

For decades, scholars have turned to empirical evidence to resolve theoretical debates about the impact of corporate governance on firm value. Initially, the most common empirical technique to evaluate corporate governance was the short-term event study. More recently, short-term event studies have been supplemented, if not replaced, by three techniques – longer-term event studies, calendar time portfolio regressions, and Q (and other accounting-based ratio) regressions – that examine the effect of corporate governance changes over a longer term. We argue that one should apply a fair amount of skepticism in evaluating empirical studies that purport to discern the effect of corporate governance on firm value. Q regressions are theoretically unfounded and can often lead to biased results. Results derived from standard Q regressions thus shed no light on corporate governance controversies. While event studies and calendar time portfolio regressions are greatly superior to Q regressions, these methodologies have their own shortcomings, which need to be kept in mind in interpreting their results.

Speakers

Discussants

13:30

Lunch break

Session 3

15:30

Coffee break

Session 4 | Chaired by

Speakers:
Erik Lidman
16:00

Innovation: The Bright Side of Common Ownership?

Speakers:
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Innovation: The Bright Side of Common Ownership?

Time:
16:00h

Innovation: The Bright Side of Common Ownership?

Authors: Miguel Anton, Florian Ederer, Mireia Gine, Martin C Schmalz

 

Abstract

A firm has inefficiently low incentives to innovate when other firms benefit from its innovative activity and the innovating firm does not capture the full surplus of its innovations. We provide conditions under which common ownership of firms mitigates this impediment to corporate innovation. Common ownership increases innovation when technological spillovers are sufficiently large relative to product market spillovers. Otherwise, the business stealing effect of innovation dominates and common ownership reduces innovation. Empirically, product market spillovers (as measured by Jaffe/Mahalanobis proximity in product market space) decrease the effect of common ownership on innovation inputs and outputs, whereas technology spillovers (proximity in patent space) increase the effect. The sign and magnitude of the relationship between common ownership and corporate innovation varies considerably across the universe of firms depending on the relative strength of product market and technology spillovers. When product market spillovers are relatively large, an increase from the 25th to the 75th percentile of common ownership is associated with a decrease of -8.4% in citation-weighted patents. But when technology spillovers are relatively large, the same increase in common ownership is associated with an increase of +12.5% in citation-weighted patents. Our results inform the debate about the welfare effects of increasing common ownership among U.S. corporations.

Speakers

Conference Documents

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Common Ownership Directors

Time:
17:00h

Common Ownership Directors

Authors: Ofer Eldar, Yaron Nili, James Pinnington

 

Speakers

Discussants

18:00

Concluding remarks and Reception

Speakers

Erik Lidman

Presentations

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Welcome Remarks

Time:
08:45h

Speakers

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Session 1 | Chaired by

Time:
14:22h

Speakers

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The Economics of Legal Uncertainty

Time:
09:00h

The Economics of Legal Uncertainty

Authors: Jiwon Lee, David Schoenherr, Jan Starmans

Abstract

In this paper, we study how legal uncertainty affects economic activity. We develop a parsimonious model with different types of legal uncertainty that reduce economic activity and that can be classified as idiosyncratic (i.e., diversifiable) or systematic (i.e., nondiversifiable). We test the model’s predictions using microlevel data on bankruptcy judges and corporate loans from Korea. Exploiting differences in judges’ debtor-friendliness combined with random judge assignment to restructuring cases and exogenous judge rotations in the judicial system, we compute time-varying court-level measures of debtor-friendliness and legal uncertainty. We first document that firms are more likely to file for restructuring in more debtor-friendly courts with lower legal uncertainty. We further show that legal uncertainty reduces the size of credit markets. The effects are driven by high-risk firms that are most sensitive to bankruptcy law. Examining interest rates, we find that credit supply is relatively more sensitive to systematic than to idiosyncratic sources of legal uncertainty relative to credit demand.

Speakers

Discussants

Conference Documents

Back to all presentations

Outside Director Tenure Limit: The 2020 Korean Experiment

Time:
10:00h

Outside Director Tenure Limit: The 2020 Korean Experiment

Authors: Minjae Kim, Sojung Kim, Woochan Kim

Speakers

Discussants

Back to all presentations

Session 2 | Chaired by

Time:
14:22h

Speakers