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Moving into cloud computing represents a major marketing shift because it replaces on-premises offerings requiring large, up-front payments with hosted computing resources made available on-demand on a pay-per-use pricing scheme. However, little is known about the effect of this shift on cloud vendors' financial performance. This study draws on a longitudinal data set of 435 publicly listed business-to-business (B2B) firms within the computer software and services industries to investigate, from the vendors' perspective, the shareholder wealth effect of transitioning to the cloud. Using a value relevance model, we find that an unanticipated increase in the cloud ratio (i.e., the share of a firm's revenues from cloud computing) has a positive and significant effect on excess stock returns; and it has a negative and significant effect on idiosyncratic risk. Yet these effects vary across market structures and firms. In particular, unanticipated increases in market maturity intensify the positive effect of moving into the cloud on excess stock returns. Further, unexpected increases in advertising intensity strengthen the negative effect of shifting to the cloud on idiosyncratic risk., Author(s): Mehdi Nezami [sup.1] , Kapil R. Tuli [sup.2] , Shantanu Dutta [sup.3] Author Affiliations: (1) grid.253259.a, 0000 0001 2183 4598, Foster College of Business, Bradley University, , 1501 W. [...]

SYNOPSIS: We examine the effectiveness of corporate governance in influencing insider trading around private in-house meetings (hereafter "private meetings") between management and investors in China. Consistent with better corporate governance curbing (1) disclosure of nonpublic price-sensitive information and (2) insider trading, we find that better governance quality is associated with reduced insider trading frequency, value, and profitability around private meetings. Firms with better corporate governance appear to exchange less price-sensitive information with outsider investors around private meetings, which limits the opportunity to make profitable insider trades. Our results are economically significant and robust using instrumental variable and propensity score matching approaches to address endogeneity. We argue that improving corporate governance quality may be a partial substitute for costly government regulation designed to curb insider trading around private meetings. JEL Classifications: G34; G14; G18. [ABSTRACT FROM AUTHOR]