Mandatory Worker Representation on the Board and Its Effect on Shareholder WealthCitation formats

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Mandatory Worker Representation on the Board and Its Effect on Shareholder Wealth. / Petry, Stefan.

In: Financial Management, 23.07.2017.

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@article{66722e6e1e9449dc9faf84a021ce2b94,
title = "Mandatory Worker Representation on the Board and Its Effect on Shareholder Wealth",
abstract = "Several countries legally mandate representation of workers on boards of directors. The evidence on the shareholder wealth effects of such a corporate governance design is mixed. I examine abnormal announcement returns around major milestones leading to the passing of the German Codetermination Act in 1976. I find that news about the act causes an average decline in the equity value of firms that are certain to have been affected by the new law of up to 1.5{\%} relative to the control firms. Firms close to the regulatory threshold of 2,000 employees remain unaffected implying an expectation of avoiding compliance.",
author = "Stefan Petry",
year = "2017",
month = "7",
day = "23",
doi = "10.1111/fima.12181",
language = "English",
journal = "Financial Management",
issn = "0046-3892",
publisher = "John Wiley & Sons Ltd",

}

RIS

TY - JOUR

T1 - Mandatory Worker Representation on the Board and Its Effect on Shareholder Wealth

AU - Petry, Stefan

PY - 2017/7/23

Y1 - 2017/7/23

N2 - Several countries legally mandate representation of workers on boards of directors. The evidence on the shareholder wealth effects of such a corporate governance design is mixed. I examine abnormal announcement returns around major milestones leading to the passing of the German Codetermination Act in 1976. I find that news about the act causes an average decline in the equity value of firms that are certain to have been affected by the new law of up to 1.5% relative to the control firms. Firms close to the regulatory threshold of 2,000 employees remain unaffected implying an expectation of avoiding compliance.

AB - Several countries legally mandate representation of workers on boards of directors. The evidence on the shareholder wealth effects of such a corporate governance design is mixed. I examine abnormal announcement returns around major milestones leading to the passing of the German Codetermination Act in 1976. I find that news about the act causes an average decline in the equity value of firms that are certain to have been affected by the new law of up to 1.5% relative to the control firms. Firms close to the regulatory threshold of 2,000 employees remain unaffected implying an expectation of avoiding compliance.

U2 - 10.1111/fima.12181

DO - 10.1111/fima.12181

M3 - Article

JO - Financial Management

JF - Financial Management

SN - 0046-3892

M1 - 10.1111/fima.12181

ER -