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This table reports merger characteristics. Panel A reports mean, median and standard deviation for the total sample. Panel B reports similar statistics by year “Relative Size” is the ratio of market value of target firm to acquiring firm, measured at the fiscal year end prior to merger announcement. “Transaction Value” is total value of consideration paid by the acquirer, excluding fees and expenses. “Stock Deals” is a dummy variable equal to 1 if the payment method involves equity, O otherwise. “Diversifying Deals” is defined as equal to 1 if the 2-digit SIC code of target is different from the 2-digit SIC code of the acquiring firm.

Table 38 This table reports merger characteristics. Panel A reports mean, median and standard deviation for the total sample. Panel B reports similar statistics by year “Relative Size” is the ratio of market value of target firm to acquiring firm, measured at the fiscal year end prior to merger announcement. “Transaction Value” is total value of consideration paid by the acquirer, excluding fees and expenses. “Stock Deals” is a dummy variable equal to 1 if the payment method involves equity, O otherwise. “Diversifying Deals” is defined as equal to 1 if the 2-digit SIC code of target is different from the 2-digit SIC code of the acquiring firm.

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Table 1.3 My company works in the following industry or industries:
Table 1.3 My company works in the following industry or industries:
Notes: Survey invitees were selected because each had evidence of an existing risk management organization. This selection decision necessarily introduces a bias toward acceptance of risk management on the part of responding companies. Except where specifically cited, the rest of this report contains analysis and results that are based upon the data of those respondents, indicating that they are either among the largest in their industry (39 responses) or among the top 25 percent in their industry (11 responses), a total of 50 responses. We note also that there is a concentration of respondents within financial services. Where survey response results for non-financial companies illustrate striking differences from those of financial service firms, they are highlighted in the report that follows.
Notes: Survey invitees were selected because each had evidence of an existing risk management organization. This selection decision necessarily introduces a bias toward acceptance of risk management on the part of responding companies. Except where specifically cited, the rest of this report contains analysis and results that are based upon the data of those respondents, indicating that they are either among the largest in their industry (39 responses) or among the top 25 percent in their industry (11 responses), a total of 50 responses. We note also that there is a concentration of respondents within financial services. Where survey response results for non-financial companies illustrate striking differences from those of financial service firms, they are highlighted in the report that follows.
A.2. Is there a single individual accountable for risk management on the board of directors? Another measure of governance seriousness of purpose conceming risk management matters is whether or not there is a single board-level individual with responsibility for being familiar with the risk management organization of their firm. We note that only 31 percent of firms report that such clear accountability is in place, even among those firms selected for our study, which we assume are likely to be more advanced in their approaches.
A.2. Is there a single individual accountable for risk management on the board of directors? Another measure of governance seriousness of purpose conceming risk management matters is whether or not there is a single board-level individual with responsibility for being familiar with the risk management organization of their firm. We note that only 31 percent of firms report that such clear accountability is in place, even among those firms selected for our study, which we assume are likely to be more advanced in their approaches.
Of those who do engage in external benchmarking via consultants, typically this was carried out every two years or so, with many commenting that benchmarking is done “as needed.”
Of those who do engage in external benchmarking via consultants, typically this was carried out every two years or so, with many commenting that benchmarking is done “as needed.”
Figure 6.2. Corporate governance and its portfolio of moral hazard risks Governance and Corporate Moral Vulnerability
Figure 6.2. Corporate governance and its portfolio of moral hazard risks Governance and Corporate Moral Vulnerability
n= 70; *p< .05; **p< .01; ***p< .001; two-tail significance reported. Table G1 Descriptive statistics and correlations
n= 70; *p< .05; **p< .01; ***p< .001; two-tail significance reported. Table G1 Descriptive statistics and correlations
able G2 Quadrant descriptives CORPORATE PORTFOLIO OF MORAL HAZARD RISKS FROM BUSINESS UNITS IN COUNTRIES, _,
able G2 Quadrant descriptives CORPORATE PORTFOLIO OF MORAL HAZARD RISKS FROM BUSINESS UNITS IN COUNTRIES, _,
ible 6.3 Results of regression analysis predicting corporate moral vulnerability
ible 6.3 Results of regression analysis predicting corporate moral vulnerability
n = 70; *p < .10; *p < .05; **p < .01; ***p < .001; one-tail significance; standardized Beta; intercept not reported > Profit measure used is EBIT. Table 6.4 Results of regression analysis predicting corporate profit?
n = 70; *p < .10; *p < .05; **p < .01; ***p < .001; one-tail significance; standardized Beta; intercept not reported > Profit measure used is EBIT. Table 6.4 Results of regression analysis predicting corporate profit?
Table 6.5a Results of regression analysis of profitability?
Table 6.5a Results of regression analysis of profitability?
Table 6.5b Results of regression analysis
Table 6.5b Results of regression analysis
Figure 7.1 Ethical relationships in a law court. Judge, jury, and experts independent of accused
Figure 7.1 Ethical relationships in a law court. Judge, jury, and experts independent of accused
DIVISION OF POWER BY SEPARATING THE GOVERNANCE POWER OF DIRECTORS FROM THEIR EXECUTIVE POWERS
DIVISION OF POWER BY SEPARATING THE GOVERNANCE POWER OF DIRECTORS FROM THEIR EXECUTIVE POWERS
Figure 7.3 Ethical relationships created with a democratically elected governance board
Figure 7.3 Ethical relationships created with a democratically elected governance board
Table 7.2 Loss and distortion of information in hierarchies
Table 7.2 Loss and distortion of information in hierarchies
Shann Turnbull
Shann Turnbull
Figure 7.7 Functions and activities of the Mondragon compound board. Source: Whyte and Whyte, 1988
Figure 7.7 Functions and activities of the Mondragon compound board. Source: Whyte and Whyte, 1988
Table 8.2 Result from Model (1) for estimating monitoring-induced supervi- sory board meeting frequency (MISBMF) The subscript Lag indicates a variable in the past year. The variable RISK is the total liabilities- total assets ratio in a year. SBMF measures the meeting frequency of the supervisory board in a year, and SBS is its size. SBCTurnover is a dummy variable which measures whether there is a turnover of the chairman of the supervisory board in a year. The dummy variable SBC Paid indicates whether a supervisory board chair is paid by the company, and the continuous variable SBC Share measures the percentage of ownership held by a supervisory board chair. The variable SBC Tenure indicates the number of days for which a supervi- sory board chair has been in this position, and two other variables illustrate the gender (SBC Gender) and the age (SBC Age) of a supervisory board chair, respec- tively. The accounting profitability (AP) is measured by return on assets, the ratio of net income over total assets. We also use the capital gain in financial markets to measure a company’s market return (MR), and adopt Tobin’s Q to measure its growth potential (GROWTH). The variable IndDir indicates the number of independent directors in a year, and we use the natural log of total book value of assets (LNTA) to measure the firm size. The Herfindahl index (HHI) illustrates ownership concentration, and the dummy variable DUAL indi- cates whether the CEO of the company is also the chairman of its board of direc- tors. STATE and FOREIGN are dummy variables indicating whether the largest shareholder of a company is state-owned or a foreigner, respectively. We use 12 dummy variables constructed on the basis of 13 industries categorized by CSRC to measure the industry effects.
Table 8.2 Result from Model (1) for estimating monitoring-induced supervi- sory board meeting frequency (MISBMF) The subscript Lag indicates a variable in the past year. The variable RISK is the total liabilities- total assets ratio in a year. SBMF measures the meeting frequency of the supervisory board in a year, and SBS is its size. SBCTurnover is a dummy variable which measures whether there is a turnover of the chairman of the supervisory board in a year. The dummy variable SBC Paid indicates whether a supervisory board chair is paid by the company, and the continuous variable SBC Share measures the percentage of ownership held by a supervisory board chair. The variable SBC Tenure indicates the number of days for which a supervi- sory board chair has been in this position, and two other variables illustrate the gender (SBC Gender) and the age (SBC Age) of a supervisory board chair, respec- tively. The accounting profitability (AP) is measured by return on assets, the ratio of net income over total assets. We also use the capital gain in financial markets to measure a company’s market return (MR), and adopt Tobin’s Q to measure its growth potential (GROWTH). The variable IndDir indicates the number of independent directors in a year, and we use the natural log of total book value of assets (LNTA) to measure the firm size. The Herfindahl index (HHI) illustrates ownership concentration, and the dummy variable DUAL indi- cates whether the CEO of the company is also the chairman of its board of direc- tors. STATE and FOREIGN are dummy variables indicating whether the largest shareholder of a company is state-owned or a foreigner, respectively. We use 12 dummy variables constructed on the basis of 13 industries categorized by CSRC to measure the industry effects.
*eD < 0.01, **p < 0.05, *p<0.1 Risk-Taking Behaviors in Chinese Companies
*eD < 0.01, **p < 0.05, *p<0.1 Risk-Taking Behaviors in Chinese Companies
Table 8.3 Results from Model (2) for financial risk - supervisory board analysis he subscript Lag indicates a variable in the past year. The dependent variable RISK is the total liabilities-total assets ratio in a year. MISBMF is the nonitoring-induced supervisory board meeting frequency, and SBS is the size of he supervisory board. The dummy variable SBC Paid indicates whether a super- visory board chair gets paid in the company, and the continuous variable SBC Share measures the percentage of ownership held by a supervisory board chair The variable SBCTenure indicates the number of days for which a supervisory board chair has been in this position, and two othervariables illustrate he gender (SBC Gender) and the age (SBCAge) of a supervisory board chair, espectively. The accounting profitability (AP) is measured by return on assets, he ratio of net income over total assets. We also use the capital gain in financial narkets to measure a company’s market return (MR), and adopt Tobin’s Q to neasure its growth potential (GROWTH). The variable IndDir indicates the vumber of independent directors in a year, and we use the natural log of total 900k value of assets (LNTA) to measure the firm size. The Herfindahl index HHI) illustrates ownership concentration, and the dummy variable DUAL indi- cates whether the CEO of the company is also the chairman of its board of direc- ors. STATE and FOREIGN are dummy variables indicating whether the largest shareholder of a company is state-owned or a foreigner, respectively. We use 12 Jummy variables constructed on the basis of 13 industries categorized by CSRC ‘oO measure the industry effects.
Table 8.3 Results from Model (2) for financial risk - supervisory board analysis he subscript Lag indicates a variable in the past year. The dependent variable RISK is the total liabilities-total assets ratio in a year. MISBMF is the nonitoring-induced supervisory board meeting frequency, and SBS is the size of he supervisory board. The dummy variable SBC Paid indicates whether a super- visory board chair gets paid in the company, and the continuous variable SBC Share measures the percentage of ownership held by a supervisory board chair The variable SBCTenure indicates the number of days for which a supervisory board chair has been in this position, and two othervariables illustrate he gender (SBC Gender) and the age (SBCAge) of a supervisory board chair, espectively. The accounting profitability (AP) is measured by return on assets, he ratio of net income over total assets. We also use the capital gain in financial narkets to measure a company’s market return (MR), and adopt Tobin’s Q to neasure its growth potential (GROWTH). The variable IndDir indicates the vumber of independent directors in a year, and we use the natural log of total 900k value of assets (LNTA) to measure the firm size. The Herfindahl index HHI) illustrates ownership concentration, and the dummy variable DUAL indi- cates whether the CEO of the company is also the chairman of its board of direc- ors. STATE and FOREIGN are dummy variables indicating whether the largest shareholder of a company is state-owned or a foreigner, respectively. We use 12 Jummy variables constructed on the basis of 13 industries categorized by CSRC ‘oO measure the industry effects.
Figure 10.1 Governance structure
Figure 10.1 Governance structure
Table 11.1 Frequency of companies in the DJGSI (1999-2006)
Table 11.1 Frequency of companies in the DJGSI (1999-2006)
—e—e—— This table lists the companies that disappeared the year after being selected to the Dow Jones Sustainability Index and the reason for their removal.
—e—e—— This table lists the companies that disappeared the year after being selected to the Dow Jones Sustainability Index and the reason for their removal.
Figure 11.1 Total retums index: Sustainable firms vs. Wilshire-Large Cap stocks Do Corporate Boards Care A bout Sustainability?
Figure 11.1 Total retums index: Sustainable firms vs. Wilshire-Large Cap stocks Do Corporate Boards Care A bout Sustainability?
Table 115 Performance of DJGSI stocks by year, 2000-7
Table 115 Performance of DJGSI stocks by year, 2000-7
Table 11.6 Sharpe ratios sustainable (DJGSI) vs. industry matched firms Returns are measured the year after the company was put on the Dow Jones Global Sustainability Index (DJGSI). For each DJGSI company, there is an industry matched firm of a similar size. The closest industry match (based on two digit SIC code) in asset size the year prior to being put on the index is the matched firm. This is for companies being put on the index from 1999-2006. Sharpe ratios are based on daily returns. The calculation is the difference between the annual return of a stock and the risk free rate for the year divided by the standard deviation of the daily returns. The Mean Difference is the difference between each DJGSI com- pany’s Sharpe ratio and the Sharpe ratio of its matched firm.
Table 11.6 Sharpe ratios sustainable (DJGSI) vs. industry matched firms Returns are measured the year after the company was put on the Dow Jones Global Sustainability Index (DJGSI). For each DJGSI company, there is an industry matched firm of a similar size. The closest industry match (based on two digit SIC code) in asset size the year prior to being put on the index is the matched firm. This is for companies being put on the index from 1999-2006. Sharpe ratios are based on daily returns. The calculation is the difference between the annual return of a stock and the risk free rate for the year divided by the standard deviation of the daily returns. The Mean Difference is the difference between each DJGSI com- pany’s Sharpe ratio and the Sharpe ratio of its matched firm.
Annualized daily standard deviation ** * indicates that difference between the DJGSI company’s annualized daily standard deviation and the matched firm’s standard deviation is significantly different from zero at the 0.05, 0.10 level.
Annualized daily standard deviation ** * indicates that difference between the DJGSI company’s annualized daily standard deviation and the matched firm’s standard deviation is significantly different from zero at the 0.05, 0.10 level.
*k* ** * indicates that the median or mean DJGSI company’s Q ratio is signifi- cantly different than the matched companies at the 0.01, 0.05 and 0.10 level.
*k* ** * indicates that the median or mean DJGSI company’s Q ratio is signifi- cantly different than the matched companies at the 0.01, 0.05 and 0.10 level.
Panel A Sunamary statistics of sangple firms
Panel A Sunamary statistics of sangple firms
Table 12.2. CEO and executive compensation of acquiring firms and target finns This table reports mean and median comparison between acquiring firms and target firms’ CEO and top five executives’ incentive compensation. “Stockown_ CEO” (“Stockown mgmt’) is the percentage of stockownership by CEO and (average of top five executives). “EQU1 CEO” (“EQU1 mgmt’) is the ratio of total equity-based compensation including value of the total options granted and total stockholdings to total wealth as defined in Panel A for CEO (average of top five executives). “EQU2_ CEO” (“EQU2 mgmt”) is the ratio of total equity-based com- pensation including the value of total options granted, total stockholdings, and the value of restricted stocks holdings to the total wealth of CEO (or executives). “Optdelta-CEO” (“Optdelta_mgmt’”) is the dollar change of CEO’s (average of top five executives) total stock options given one dollar change in stock price. “Optincen CEO” (“Optincen mgmt’) is the total dollar change in CEO’s (average of top five executives) total option holdings when there is 1% change in the stock price. “Totincen CEO” (“Totincen_mgmt’”) is the total dollar change in CEO’s (average of top five executives) total equity based compensation (including both stock holdings and option holdings) when there is 1% change in the stock price (Core and Guay (1999)). “Optvega_CEO” (“Optvega_mgmt’”) is the change in the CEO’s (top five executives) stock option values given 1% change in the stock retumm volatility. “GIM Index”, created by Gomper, Ishii, and Metrick (2003), is the total score of anti-takeover provisions adopted by the firm. “BCF Index” created by Bebchuk, Cohen, and Ferrell (2004) is the total score of six anti-takeover provisions. “Golden Parachute” is a dummy variable equal to one if the firm has golden parachute provision, O otherwise. “Poison Pill” is a dummy variable equal to one if the firm has poison pill provision, O otherwise. 'T-statistics for mean difference and Z-statistics for median difference from Wilcoxon rank sum test are presented in the parentheses. *** Significant at the 1% level; “Significant at the 5% level; “Significant at the 10% level.
Table 12.2. CEO and executive compensation of acquiring firms and target finns This table reports mean and median comparison between acquiring firms and target firms’ CEO and top five executives’ incentive compensation. “Stockown_ CEO” (“Stockown mgmt’) is the percentage of stockownership by CEO and (average of top five executives). “EQU1 CEO” (“EQU1 mgmt’) is the ratio of total equity-based compensation including value of the total options granted and total stockholdings to total wealth as defined in Panel A for CEO (average of top five executives). “EQU2_ CEO” (“EQU2 mgmt”) is the ratio of total equity-based com- pensation including the value of total options granted, total stockholdings, and the value of restricted stocks holdings to the total wealth of CEO (or executives). “Optdelta-CEO” (“Optdelta_mgmt’”) is the dollar change of CEO’s (average of top five executives) total stock options given one dollar change in stock price. “Optincen CEO” (“Optincen mgmt’) is the total dollar change in CEO’s (average of top five executives) total option holdings when there is 1% change in the stock price. “Totincen CEO” (“Totincen_mgmt’”) is the total dollar change in CEO’s (average of top five executives) total equity based compensation (including both stock holdings and option holdings) when there is 1% change in the stock price (Core and Guay (1999)). “Optvega_CEO” (“Optvega_mgmt’”) is the change in the CEO’s (top five executives) stock option values given 1% change in the stock retumm volatility. “GIM Index”, created by Gomper, Ishii, and Metrick (2003), is the total score of anti-takeover provisions adopted by the firm. “BCF Index” created by Bebchuk, Cohen, and Ferrell (2004) is the total score of six anti-takeover provisions. “Golden Parachute” is a dummy variable equal to one if the firm has golden parachute provision, O otherwise. “Poison Pill” is a dummy variable equal to one if the firm has poison pill provision, O otherwise. 'T-statistics for mean difference and Z-statistics for median difference from Wilcoxon rank sum test are presented in the parentheses. *** Significant at the 1% level; “Significant at the 5% level; “Significant at the 10% level.
This table reports logit estimates of executive compensation effect on the probability of firms tuming to be acquiring firms and target firms. The dependent variable is a dummy variable equal to one if the firm is an acquiring firm, O if the finmis target. “MTBASS” is the market-to-book ratio of firm’s assets. “VOLATILITY ” of target firms is defined as the standard deviation of sixty month stock retums one month prior to the merger announcement. “ADJBHR1” is the market adjusted buy-and-hold retum one year prior to one month before the merger announcement. “ROA” is retum on assets. All other variables are defined similarly as Table 12.2. Also, all variables are measured at the fiscal year end prior to merger announcement. The coefficients are estimates of the marginal effect on the probabil- ity of departure of an increase in the independent variable. AProb measures the change in the probability of CEO tumover, given a one-standard deviation change from the mean value of the independent variable, i.e. the mean value minus one standard deviation. For dummy variables, the AProb is the change in the probability that the dummy variable equals zero to the probability that the dummy variable equals one T-statistics are shown in parentheses. Results are the same when we use CEO compensation instead of the average of top five executives’ compensation.
This table reports logit estimates of executive compensation effect on the probability of firms tuming to be acquiring firms and target firms. The dependent variable is a dummy variable equal to one if the firm is an acquiring firm, O if the finmis target. “MTBASS” is the market-to-book ratio of firm’s assets. “VOLATILITY ” of target firms is defined as the standard deviation of sixty month stock retums one month prior to the merger announcement. “ADJBHR1” is the market adjusted buy-and-hold retum one year prior to one month before the merger announcement. “ROA” is retum on assets. All other variables are defined similarly as Table 12.2. Also, all variables are measured at the fiscal year end prior to merger announcement. The coefficients are estimates of the marginal effect on the probabil- ity of departure of an increase in the independent variable. AProb measures the change in the probability of CEO tumover, given a one-standard deviation change from the mean value of the independent variable, i.e. the mean value minus one standard deviation. For dummy variables, the AProb is the change in the probability that the dummy variable equals zero to the probability that the dummy variable equals one T-statistics are shown in parentheses. Results are the same when we use CEO compensation instead of the average of top five executives’ compensation.
* Significant at 10%; ** Significant at 5%; *** Significant at 1%
* Significant at 10%; ** Significant at 5%; *** Significant at 1%
ME LARCUULLVE CYULLY CULILROHISGUOTT ~ LAVELLE YTB GER LROLRUVELOLL YI RG LIEU S iabac ta. This table reports mean and median comparison of acquiring finm CEO and top five executives’ incentive compensation between diversifyinc mergers and nondiversifying mergers. Variables are defined the same as Table 12.3. All variables are measured at the fiscal year end prior tc merger announcement. T-statistics for mean difference and Z-statistics for median difference from Wilcoxon rank sum test are presented in the parentheses. *** Significant at the 1% level; **Significant at the 5% level; *Significant at the 10% level.
ME LARCUULLVE CYULLY CULILROHISGUOTT ~ LAVELLE YTB GER LROLRUVELOLL YI RG LIEU S iabac ta. This table reports mean and median comparison of acquiring finm CEO and top five executives’ incentive compensation between diversifyinc mergers and nondiversifying mergers. Variables are defined the same as Table 12.3. All variables are measured at the fiscal year end prior tc merger announcement. T-statistics for mean difference and Z-statistics for median difference from Wilcoxon rank sum test are presented in the parentheses. *** Significant at the 1% level; **Significant at the 5% level; *Significant at the 10% level.
Note: Our results are the same or even stronger when we rank the sample by target’s research and expenditure ratio, capital expenditur and market-to-book ratio. lable 1490 CEO ana top execullve compensation of acquinng Trms and the r1SkK OF target finns This table compares acquiring firms’ CEO and top five executives’ compensation for three terciles ranked by target firms’ volatility. Volatility of target firms is defined as the standard deviation of sixty month stock retums one month prior to the merger announcement. Variables in this table are defined similarly as Table 12.3. All variables are measured at the fiscal year end prior to merger announcement. ‘T-statistics for mean difference and Z-statistics for median difference from Wilcoxon rank sum test are presented in the parentheses. kk Significant at the 1% level; ** Significant at the 5% level; *Significant at the 10% level.
Note: Our results are the same or even stronger when we rank the sample by target’s research and expenditure ratio, capital expenditur and market-to-book ratio. lable 1490 CEO ana top execullve compensation of acquinng Trms and the r1SkK OF target finns This table compares acquiring firms’ CEO and top five executives’ compensation for three terciles ranked by target firms’ volatility. Volatility of target firms is defined as the standard deviation of sixty month stock retums one month prior to the merger announcement. Variables in this table are defined similarly as Table 12.3. All variables are measured at the fiscal year end prior to merger announcement. ‘T-statistics for mean difference and Z-statistics for median difference from Wilcoxon rank sum test are presented in the parentheses. kk Significant at the 1% level; ** Significant at the 5% level; *Significant at the 10% level.
Rae £4.0 FACQUITIDIO TITS CACCUUVE COTTVETISAUOTT dh Listy tolyeus Panel A ‘This table reports OLS estimates of executive compensation effect on acquirer’s choice of target firms. The dependent variable is volatility of target firms which is measured as the standard deviation of sixty month stock retums one month prior to the merger announcement (T_ volatility). “ADJBHR1” is the market adjusted buy-and-hold retum one year prior to one month before the merger announcement. “ROA” is retum on assets. All other variables are defined similarly as Table 12.3. Also, all variables are measured at the fiscal year end prior to merger announcement. Results are the same when we use CEO compensation instead of the average of top five executives’ compensation. Results are similar when the dependent variables are target finms’ market-to-book ratios, capital expenditure over sales or R&D expenditure over sales. T-statistics are shown in parentheses.
Rae £4.0 FACQUITIDIO TITS CACCUUVE COTTVETISAUOTT dh Listy tolyeus Panel A ‘This table reports OLS estimates of executive compensation effect on acquirer’s choice of target firms. The dependent variable is volatility of target firms which is measured as the standard deviation of sixty month stock retums one month prior to the merger announcement (T_ volatility). “ADJBHR1” is the market adjusted buy-and-hold retum one year prior to one month before the merger announcement. “ROA” is retum on assets. All other variables are defined similarly as Table 12.3. Also, all variables are measured at the fiscal year end prior to merger announcement. Results are the same when we use CEO compensation instead of the average of top five executives’ compensation. Results are similar when the dependent variables are target finms’ market-to-book ratios, capital expenditure over sales or R&D expenditure over sales. T-statistics are shown in parentheses.
Panel B_ This table reports OLS estimates of executive compensation effect on the riskiness of the target firms. ‘The dependent variabl. market-to-book ratios of target firms at year end (T_mtb) prior to the merger announcement. “ADJBHR1” is the market adjusted buy-at hold retum one year prior to one month before the merger announcement. “ROA” is retum on assets. All othervariables are defined simile as Table 12.3. Also, all variables are measured at the fiscal year end prior to merger announcement. Results are the same when we use C] compensation instead of the average of top five executives’ compensation. Results are similar when the dependent variables are target fir market-to-book ratios, capital expenditure over sales or R&D expenditure over sales. 'T-statistics are shown in parentheses.
Panel B_ This table reports OLS estimates of executive compensation effect on the riskiness of the target firms. ‘The dependent variabl. market-to-book ratios of target firms at year end (T_mtb) prior to the merger announcement. “ADJBHR1” is the market adjusted buy-at hold retum one year prior to one month before the merger announcement. “ROA” is retum on assets. All othervariables are defined simile as Table 12.3. Also, all variables are measured at the fiscal year end prior to merger announcement. Results are the same when we use C] compensation instead of the average of top five executives’ compensation. Results are similar when the dependent variables are target fir market-to-book ratios, capital expenditure over sales or R&D expenditure over sales. 'T-statistics are shown in parentheses.
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