Corporate governance and its effect on bond yield spreads

• Autor(a) principal: Retterath, Katrin
• Data de Publicação: 2019
• Tipo de documento: Dissertação
• Idioma: eng
• Título da fonte: Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos)
• Texto Completo: http://hdl.handle.net/10362/69928
• topic: Regression discontinuity; Corporate governance; Takeover defenses; Domínio/Área Científica::Ciências Sociais::Economia e Gestão

This paper investigates, whether including more corporate governance provisions or adding takeover defenses at annual shareholder meetings has a material impact on bond yield spreads. The analysis focuses on close call votes at annual shareholder meetings and uses a regression discontinuity design. This provides a clean estimate that accounts for the market expectations which form prior to the voting event and can therefore deliver more accurate estimates. I found that the bond yield spread increases by 0.29 percentage points if a governance proposal is passed but decreases by -1.77 percentage points if a takeover defense is added, after the voting percentage has surpassed the required threshold.