Governance Mechanisms and Bond Prices

@article{Cremers2006GovernanceMA,
  title={Governance Mechanisms and Bond Prices},
  author={M. Cremers and Vinay B. Nair and Chenyang Wei},
  journal={Texas Finance Festival 2005 (Archive)},
  year={2006}
}
  • M. Cremers, Vinay B. Nair, Chenyang (Jason) Wei
  • Published 2006
  • Business
  • Texas Finance Festival 2005 (Archive)
  • We investigate the effects of shareholder governance mechanisms on bondholders and document two new findings. First, the impact of shareholder control (proxied by large institutional blockholders) on credit risk depends on takeover vulnerability. Shareholder control is associated with higher (lower) yields if the firm is exposed to (protected from)takeovers. In the presence of shareholder control, the difference in bond yields due to differences in takeover vulnerability can be as high as 66… CONTINUE READING
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