Effect of Legal Sanction for Shareholders’ Expropriation on the Corporate Valuation ()
ABSTRACT
The purpose of this paper is to study whether the legal sanction by
relevant departments for the majority shareholders’ expropriation affects the
valuation of the firms’ or other shareholders’ interests.
This study takes the legal sanction by relevant departments for the majority
shareholders’ expropriation as external legal
environment change events, so whether the return of the listed company
shows significant difference during the window before and after the listed
company has been sanctioned by the relevant departments for the majority shareholders’
expropriation will be the judgment whether
the sanction has any obvious effect on the listed company and the stock
market. The study demonstrates that almost all empirical results show that the
positive and negative effects don’t pass the significance test, illustrating that
the legal sanction system just has limited effect on the corporate governance
of the listed company.
Share and Cite:
Yao, Z. and Li, Y. (2016) Effect of Legal Sanction for Shareholders’ Expropriation on the Corporate Valuation.
Modern Economy,
7, 849-858. doi:
10.4236/me.2016.78088.