Status : Verified
| Personal Name | Angeles, Joseph Emmanuel L. |
|---|---|
| Resource Title | Effects of regulation on shareholders' wealth |
| Date Issued | April 2014 |
| Abstract | Regulatory risk is defined as “the risk of operating or investing in a country where regulatory changes may have an adverse impact on earnings or returns”1 and is consistently deemed one of the most significant risks for businesses across the world.2 This may result when a regulator’s risk preferences contradict those of the firm (Strausz, 2011). Research indicates that regulatory changes may affect shareholder wealth (e.g. Greenstone, Oyer, & Vissing Jorgensen (2006)). The effects of regulatory changes may be measured by estimating the abnormal returns associated with the event (OECD, 2009). This paper focuses on the securities regulation, nationalization, and mining sectors which have pervasive effects on all listed firms and/or untapped potential. In the securities regulation field, the results are generally consistent with extant literature. Initiation of proceedings at the trial court to prosecute insider traders and stock price manipulators are associated with positive returns. Decisions of the Supreme Court on interlocutory matters, or which sustain previous Court of Appeals decisions, were statistically insignificant. Interestingly, the enactment of the Securities Regulation Code resulted in negative returns. Both the launch of the PSE surveillance system and endorsement of the results of stock price manipulation investigation to the Department of Justice did not produce positive abnormal returns. In the nationalization and mining area, the results are generally consistent with theory. Supreme Court decisions which increased uncertainty and regulatory risk caused negative abnormal returns, while Supreme Court decisions which decreased uncertainty and regulatory risk by causing the regulatory regime to revert to the status quo ante caused positive abnormal returns. Releases of implementing rules drafts did not result in statistically significant effects. |
| Degree Course | Doctor of Philosophy in Business Administration |
| Language | English |
| Keyword | Corporation's growth; Corporations; Economic value; Finance; Stockholders wealth |
| Material Type | Thesis/Dissertation |
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