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dc.contributor.advisorNewberry, Kaye J.
dc.creatorGeddie, Mary
dc.date.accessioned2012-04-19T13:49:09Z
dc.date.accessioned2012-04-19T13:49:10Z
dc.date.available2012-04-19T13:49:09Z
dc.date.available2012-04-19T13:49:10Z
dc.date.createdDecember 2011
dc.date.issued2011-12
dc.identifier.urihttp://hdl.handle.net/10657/238
dc.description.abstractThis study examines the link between corporate governance and the information content of bond rating downgrades. A downgrade event contains more news and should generate more market reaction when the amount of financial information publicly available prior to the event is less. The more complete the information set before the event, the less the market response to the new information. Certain corporate governance mechanisms, especially those related to the boards of directors, are designed to defend shareholders from agency conflicts that give managers incentives to manage earnings and financial reporting. However, academic research has found mixed evidence as to the relation of corporate governance and transparent financial reporting. Perhaps in some cases, stronger corporate governance is necessary because the nature of the firm makes transparency in financial reporting too costly. My study attempts to provide evidence on the circumstances in which corporate governance is most valued by the market and suggests that the level of information asymmetry should be an important consideration in corporate governance research. The data analyzed in the study are taken from the Mergent Fixed Income Security Database [FISD] for bond rating downgrades. The time period spans both the implementation of Regulation FD and the Sarbanes-Oxley Act of 2002. I control for differences in regulatory regimes during the period. I find no consistent evidence that corporate governance structures weaken market reaction to bond ratings downgrades. However, I do show that the contrast of market reactions in the high and low governance conditions is most pronounced in conditions of high information asymmetry, and especially after the implementation of Regulation FD. My research contributes to the corporate governance literature by formally demonstrating that the level of a firm’s information asymmetry can be an important factor in determining the impact of corporate governance on the market reaction to an event. As an independent signal, bond rating downgrades provide a useful setting in which to examine this relationship.
dc.format.mimetypeapplication/pdf
dc.language.isoeng
dc.rightsThe author of this work is the copyright owner. UH Libraries and the Texas Digital Library have their permission to store and provide access to this work. Further transmission, reproduction, or presentation of this work is prohibited except with permission of the author(s).
dc.subjectCorporate governance
dc.subjectInformation asymmetry
dc.subjectAnalyst error
dc.subjectBond rating downgrades
dc.subject.lcshAccounting
dc.titleTHE ROLE OF INFORMATION ASYMMETRY IN MARKET REACTIONS TO BOND RATING DOWNGRADES: EXPLORING THE IMPACT OF CORPORATE GOVERNANCE
dc.date.updated2012-04-19T13:49:11Z
dc.type.genreThesis
thesis.degree.nameDoctor of Philosophy
thesis.degree.levelDoctoral
thesis.degree.disciplineBusiness Administration
thesis.degree.grantorUniversity of Houston
thesis.degree.departmentAccountancy and Taxation, Department of
dc.contributor.committeeMemberWerner, Steve
dc.contributor.committeeMemberLu, Tong
dc.contributor.committeeMemberSivaramakrishnan, Konduru
dc.type.dcmiText
dc.format.digitalOriginborn digital
thesis.degree.majorAccounting
dc.description.departmentAccountancy and Taxation, Department of
thesis.degree.collegeC. T. Bauer College of Business


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