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The Effects of Appointment or Dismissal of Outside Directors on Corporate Governance and Stock Price

  • Journal of Knowledge Information Technology and Systems
  • Abbr : JKITS
  • 2012, 7(6), pp.47-62
  • Publisher : Korea Knowledge Information Technology Society
  • Research Area : Interdisciplinary Studies > Interdisciplinary Research
  • Published : December 31, 2012

노승재 1

1글로벌가치연구소

Accredited

ABSTRACT

This study examines the effects of corporate governance on Korean firm values. In particular, with regard to the quality of corporate governance structure, I look into the stock price impacts of the appointment or dismissal of outside directors. I used event study and t-test methods were used for the empirical tests on the effects of the announcement effects of the appointment and dismissal of outside directors. As for the announcement effect of the appointment or dismissal of outside directors, I found that the stock price reaction depended on the quality of corporate governance structure, and further that the dismissal of outside directors, especially for firms with inferior corporate governance structure has a negative impact on stock prices, possibly due to the information asymmetry problem.

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