Publication Type
Journal Article
Version
acceptedVersion
Publication Date
6-2011
Abstract
This paper examines the impact of corporate governance on the adverse selection component of the bid-ask spread of stocks listed on the Singapore Exchange. These companies have been identified by Credit Lyonnais Securities Asia (CSLA) with the highest level of corporate governance among 25 emerging markets. We measure corporate governance by several criteria: discipline, transparency, independence, accountability, responsibilities, fairness, and social awareness. The results show that corporate governance has an inverse relationship with adverse selection. However, only the transparency dimension exhibits a significant inverse relationship with adverse selection. In addition, Government-Linked Companies (GLCs) are shown to have a smaller adverse selection component than non-GLCs.
Keywords
Corporate governance, Adverse selection, GLCs
Discipline
Asian Studies | Finance and Financial Management | Portfolio and Security Analysis
Research Areas
Finance
Publication
International Review of Economics and Finance
Volume
20
Issue
3
First Page
406
Last Page
420
ISSN
1059-0560
Identifier
10.1016/j.iref.2010.11.011
Publisher
Elsevier
Citation
Charoenwong, Charlie; DING, David K.; and Siraprapasiri, Vasan.
Adverse Selection and Corporate Governance. (2011). International Review of Economics and Finance. 20, (3), 406-420.
Available at: https://ink.library.smu.edu.sg/lkcsb_research/3596
Copyright Owner and License
Authors
Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial-No Derivative Works 4.0 International License.
Additional URL
https://doi.org/10.1016/j.iref.2010.11.011
Included in
Asian Studies Commons, Finance and Financial Management Commons, Portfolio and Security Analysis Commons