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Compared to the corporate bond and stock markets, investors prefer the CDS market to implement insider trading since the CDS market is less regulated and trading in this market on their private information is relatively easy without generating great transaction costs. Social networks, board networks in particular, are one of the central features of most economic activities and play an important role in information transmission. Therefore, investors are motivated to make use of the informational advantage gained from well-connected directors in the CDS market. In this paper, we investigate whether and how insider trading in the credit default swap (CDS) market is influenced by the corporate board network, formed by interlocking boards. We use CDS innovation as a proxy for the intensity of insider trading in the CDS market. To estimate the centrality of a firm position in the board network, we use the average quintile ranks of the four commonly used normalized board network centrality measures. We test our hypothesis based on a large sample of U.S. firms from 2004-2014 and find strong evidence that firms with a more centralized position in the board network experience a higher degree of insider trading in the CDS market. Our results suggest that the board network facilitates private information leakage to investors, resulting in more active informed trading in the CDS market. Moreover, such an association is more pronounced for firms with negative earnings news and for firms with weak corporate governance. In addition, using the enactment of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) as a quasi-natural experiment, we document that insider trading becomes less active after the passage of the Dodd-Frank Act. Our results still hold when we repeat the baseline analysis using four centrality measures separately or when controlling for the number of banking relationships. Our results add both to the insider trading literature and the social networks literature by examining the relationship between board network centrality and insider trading behavior in the CDS market. The findings indicate that board networks could serve as a relationship network that transmits private information to outside investors. JEL Classifications: G12, G14, and G2 Keywords: Insider trading, Board networks, Credit default swap (CDS), Dodd-Frank Act Corresponding Author's Email Address: Email: xuexingnan96@163.com, INTRODUCTION Insider trading in the stock market has attracted much attention for the past decades (e.g., Finnerty 1976; Bhattacharya & Nicodano 2001; Chau & Vayanos 2008; Jayaraman 2008; Cziraki et [...]

This study examines which of the two conflicting effects of rated firms' product market competition their credit ratings reflect: the disciplining effect or the risk-increasing effect. After controlling for firm-specific risk characteristics and macro-economic conditions, we find that firms in competitive industries obtain higher credit ratings than do those in less competitive industries, which indicates that the disciplining effects of competition outweigh the risk-increasing effects. The positive relation between competition and credit ratings is stronger for firms with weak corporate governance, suggesting a substitutive relation between competition and corporate governance for this group. We show that mitigation of agency problems, such as over- or under-investment and financial misreporting, is a potential explanation for the positive relation between product market competition and credit ratings., Introduction Credit ratings reflect a rating agency's forward-looking summary opinions of the creditworthiness of a particular company or debt security. These opinions, expressed in an ordinal rank code, play an [...]

We propose and test an alternative explanation for the existence of the positive governance-return relation in the 1990s and its disappearance in the 2000s: The governance-return relation is positive under good states of the economy and negative under bad states. Corporate governance mitigates investment distortions so that firms with strong governance have more valuable investment options during booms and more valuable divestiture options during busts than the ones with weak governance. Because investment options are riskier and divestiture options are less risky than assets in place, the expected returns of strongly governed firms are higher during booms but lower during busts than the weakly governed ones. Empirical evidence is consistent with our hypothesis. History: Accepted by Neng Wang, finance. Supplemental Material: The online appendix is available at https://doi.org/10.1287/mnsc.2016.2570. Keywords: corporate governance * cross-sectional stock returns * investment, 1. Introduction Does corporate governance affect the costs of equity capital? Gompers et al. (2003, hereinafter GIM) show that firms with stronger corporate governance earn higher average returns in the [...]

Although some criticisms of corporate short-termism are warranted, others are exaggerated. Institutional investors--the dominant holder of publicly traded stock--have supported long-term plans of companies with good track records. Nevertheless, certain [...]

We provide an analysis of the costs and benefits of blockholding in Europe, where it is a dominant, but certainly not universal, corporate governance strategy for shareholders of publicly listed [...]

The development of the Netherlands' corporate governance and financing structures are examined. Changes in the Dutch corporate system are reflected by a description of shareholder rights, financing structures and networks of directors. A transition from a coordinated market economy to a more liberal system has also been observed.

It is hypothesized that there is a negative relation beteen instutional hazards and vertical foreign activity compared to horizontal foreign activity. It is also theorized that there is a more negative impact of governance hazards on each type of foreign activity.

The authors argue that values influence decisions taken by policymakers and that decision and policymakers can follow one or the other of the two distinct paths - altruism and egoism. However, the main purpose of this article is to investigate outcomes of government and corporation policies formulated in accordance with theories espoused in economic rationalism or neoclassical economics. These show that they generally follow the path of egoism. The occasional result is that although multinational enterprises and other corporations contribute to the relief of natural and economic problems, they may in fact be contributing simply out of corporate self-interest. The recent collapse of financial markets in the United States and throughout the globe is identified as a result of business activities designed to seek higher corporate profits and higher executive payouts, which are motivated by self-serving values linked to the ideologies of neoclassical economics or economic rationalism. The article argues for a just and fair redistribution of incomes, possibly best achieved through the taxation system and opens the way for further research on the alternative path-the path of altruism.

Professor Ali Farazmand's seminal article on 'Building Administrative Capacity for the Age of Rapid Globalization: A Modest Prescription for the Twenty-First Century' is a powerful and comprehensive treatise on the nature and characteristics of governance and public administration - indeed, a manifesto for action. The content is rich and the scope is wide. The timely discussion offers operational concepts that can be used to analyze and remedy the economic and political ills that have resulted from many years of ideologically charged laissez-faire capitalism, including the current global credit crisis and financial meltdown (Friedman and Friedman 1990; Krugman 2007) that have affected governments and governance capacity worldwide.

The effect of national corporate governance models on inward foreign direct investment in emerging countries is investigated through tests of how family ownership and control in large Taiwanese firms affect investment from U.S. and Japanese firms. It is found that home-country corporate governance models are likely to influence the choice of local partners.

Data from a sample of 9,733 acquiring companies were analyzed to investigate the impacts of mergers and acquisitions on the returns to the shareholders. Findings show that three years into the deal, an average loss of 19% of market value is experienced by the acquirers' shareholders in Europe and the United States. The role of corporate governance institutions in invesment performance is examined.

Corporations should empower institutional investors (IIs) to play an influential role in setting right the weaknesses of the twin systems of corporate governance and pensions.

The effect of the trends of corporate governance in Central and Eastern Europe on the returns on investments in these regions between 1999 and 2003 is described.

The multivariate probit model of the relation between employment downsizing and corporate governance in Japanese companies is presented.

A study uses the principal-agent analysis to examine the right corporate governance needed for developing nations.

Traditional approaches to corporate governance focus exclusively on shareholders and neglect the large and growing role of creditors. Today's creditors craft elaborate covenants that give them a large role in [...]

Economic systems are undergoing a generalized effort to improve corporate governance structures and processes. Waves of scandals and increasing public scrutiny push institutional regulators and corporate boards of directors to establish and adopt new practices. Codes of good governance have emerged as a primary tool to increase the effectiveness of corporate governance systems. Building on extant views of institutional change, the authors study the process of the institutionalization of codes of governance and the role of the different actors involved in issuing the codes. They define four groups of actors: lawmakers, model makers, market makers, and governance enactors. They analyze a sample of 150 codes of governance introduced in 78 countries from 1978 to 2004 to describe the following stages of institutionalization: precipitating jolts, theorization, diffusion, and reinstitutionalization. This description invites thorough investigation of the content of codes of governance and the likelihood adopting such codes in a given country. Keywords: corporate governance; codes of governance; institutionalization

Impact of a firm's corporate governance and financial structure on the risk of financial crashes is analyzed in a global context.

A study, examining the evolution of corporate governance practices in context of political, cultural, and economic institutions, in the United States, Sweden and France, is presented. The inferences due to the historical variations, is also studied.