Papers by Gilberto Loureiro
Journal of International Financial Markets, Institutions and Money
Fundação Calouste Gulbenkian eBooks, 2017
2 O investimento na economia portuguesa: contexto macroeconómico 2.1 Produtividade e convergência... more 2 O investimento na economia portuguesa: contexto macroeconómico 2.1 Produtividade e convergência: uma perspetiva longa 2.2 Investimento agregado: tendências e composição 2.3 Alteração estrutural 2.4 Poupança, endividamento e financiamento 2.5 Euro e competitividade 2.6 Conclusão 2.1 Produtividade e convergência: uma perspetiva longa /
Social Science Research Network, 2015
We examine whether and how an exogenous shock to the information environment enhances insiders’ a... more We examine whether and how an exogenous shock to the information environment enhances insiders’ ability to learn from outsiders using the mandatory adoption of IFRS as our information shock. We find an increase in investment-to-price sensitivity post-IFRS that is concentrated in firms that experience significant increases in foreign institutional ownership around IFRS adoption, especially when foreign investors are from countries that matter for firms’ growth opportunities. We further document an increase in the ability of the market reaction to M&A deal announcements to predict deal completion post IFRS, especially for deals in which the market is likely to have information that is new to insiders. Our results suggest that insiders’ ability to learn from outsiders improves post-IFRS. Finally, we find improvements in post-acquisition performance post-IFRS for deals in which learning is more likely to take place, which suggests that insiders’ enhanced ability to learn from outsiders yields real economic gains.
We investigate the long-term performance of cross-delisted firms from U.S. stock markets. Using a... more We investigate the long-term performance of cross-delisted firms from U.S. stock markets. Using a sample of foreign firms listed and delisted from U.S. stock exchange markets over 2000-2012, we examine the operating performance and the long-run stock returns performance of firms post-cross-delisting. Our results suggest that cross-delisted firms have less growth opportunities than matched cross-listed firms in the long run. Moreover, firms that cross-delist after the passage of Rule 12h-6 of 2007 exhibit a significant decline in operating performance. In contrast, before the adoption of the Rule 12h-6, cross-delisted firms seem to be affected by the cost of a U.S. listing in the precross-delisting period. In addition, we provide evidence that cross-delisted firms underperform their cross-listed peers; cross-delisted firms experience negative average abnormal returns, especially in the post-delisting period.
European Financial Management, Jul 9, 2022
We investigate the wealth effects of the Takeover Bids Directive, enacted by the European Union (... more We investigate the wealth effects of the Takeover Bids Directive, enacted by the European Union (EU), on mergers and acquisitions. The directive aims at protecting target minority shareholders by restricting antitakeovers provisions and preventing managerial entrenchment. We test the regulation impact using a treatment sample of EU public acquisitions and a control sample from outside the EU. Our results suggest diverse effects of the regulation across treatment countries: acquirers from countries with better shareholder protection engage in more value‐enhancing acquisitions postregulation that could otherwise be too costly. The regulation also increases the likelihood of firms becoming targets and raises market value.
Social Science Research Network, 2010
... 1 Correspondence: Gilberto Loureiro, School of Economics and Business, University of Minho, C... more ... 1 Correspondence: Gilberto Loureiro, School of Economics and Business, University of Minho, Campus de Gualtar, 4710-057 Braga, Portugal. Email: gilberto@eeg.uminho.pt Page 2. ... I use two different measures of underwriter reputation: one based on Carter and Manaster ...
Social Science Research Network, 2019
We examine whether cross-delisted firms from the major U.S. stock exchanges experience an increas... more We examine whether cross-delisted firms from the major U.S. stock exchanges experience an increase in crash risk associated with earnings management. Consistent with our prediction, we find that earnings management has a greater positive impact on stock price crash risk post cross-delisting when compared to a control group of firms that remain cross-listed. More importantly, we find that this effect is more pronounced for cross-delisted firms from countries with weaker investor protection, poorer quality of their information environment and less conservative accounting practices. Our findings are robust to the potential endogenous nature of the cross-delisting decision, alternative measures of stock price crash risk and information asymmetry. We interpret our results as evidence of a “reverse bonding effect” following cross-delistings from U.S. stock exchanges.
Social Science Research Network, 2011
We find evidence consistent with the view that $1 CEO salaries are a ruse hiding the rentseeking ... more We find evidence consistent with the view that $1 CEO salaries are a ruse hiding the rentseeking pursuits of CEOs adopting these pay schemes. CEOs with these arrangements, despite the drastic cuts in salary, have total compensation that is similar to that at other firms, making up lost salary through not-so-visible forms of equity-based compensation. There is greater likelihood of a $1 CEO salary when the CEO is rich, overconfident, owns a sizeable ownership stake, and institutional ownership is relatively low. These powerful CEOs are in a position to draw significant undue private benefits, and need not replace certain salary dollars with risky future income. However, we find that they are at risk of engendering public outrage over their private benefits, against which the $1 salary constitutes valuable deflection of attention. Shareholders of firms with $1 CEO salaries do not fare well in the aftermath of these adoptions. Thus, rather than being the sacrificial acts they are projected to be, our findings suggest that adoptions of $1 CEO salaries are opportunistic behavior of the wealthier, more overconfident, influential CEOs. Overall, these findings support the Managerial Power Hypothesis in the literature, which claims that CEOs employ camouflage in compensation schemes to avoid public outrage over excessive private benefits.
Journal of Business Research, Mar 1, 2020
also thanks FEDER through COMPETE and FCT (Fundação para a Ciência e a Tecnologia) for financial ... more also thanks FEDER through COMPETE and FCT (Fundação para a Ciência e a Tecnologia) for financial support -COMPETE2020 under PT2020 Partnership Agreement. An earlier version of this paper was entitled,
Journal of Business Research, 2020
We investigate the impact of cross-delisting on firms' financial constraints. We find that firms ... more We investigate the impact of cross-delisting on firms' financial constraints. We find that firms that cross-delisted from a U.S. stock exchange face stronger post-delisting financial constraints than their cross-listed counterparts, as measured by investment-to-cash flow and cash-to-cash flow sensitivities. Following a delisting, the sensitivity of investment to cash flow increases significantly, and firms also tend to save more cash out of cash flows. These effects are mainly driven by cross-delisted firms from countries with weaker investor protection and are more predominant after the passage of Rule 12h-6 (of 2007), which made it easier for foreign firms to leave U.S. markets.
Social Science Research Network, 2023
Journal of Multinational Financial Management, Dec 1, 2021
Abstract Using a large sample of 1017 multinational parents with 13,758 affiliates and 3588 local... more Abstract Using a large sample of 1017 multinational parents with 13,758 affiliates and 3588 local firms in 26 countries, we examine the impact of currency crises on multinational firms and local firms between 2006 and 2014. We find that multinational affiliates use their internal capital markets to capitalize on the benefits of large currency depreciations and increase sales and investment significantly more than local firms. We trace this differential response to the use of foreign currency debt. We find that local firms without foreign currency debt are less affected by currency depreciations. In addition, multinational affiliates whose parent firms are also affected by a currency crisis in their home country experience a larger decrease in sales and investment. Our results are not driven by the global financial crisis years.
Journal of Corporate Finance, Jun 1, 2017
We examine the impact of the enactment of the Market Abuse Directive (MAD) and the Prospectus Dir... more We examine the impact of the enactment of the Market Abuse Directive (MAD) and the Prospectus Directive (PD) across 18 EU countries on seasoned equity offerings (SEOs). Using a difference-in-differences methodology, we document a significant reduction in earnings management, improved post-SEO stock return performance, and a decline in the adverse reaction to SEO announcements following the enactment of MAD. We find similar, albeit weaker, results post-PD. The impact is stronger in countries with high ex-ante institutional quality. Our results suggest that the enactment of these directives leads to improvements in information quality, which reduces information asymmetry around SEOs.
Research in International Business and Finance, Dec 1, 2022
We study the corporate governance portability from bidders to targets in Mergers and Acquisitions... more We study the corporate governance portability from bidders to targets in Mergers and Acquisitions and its impact on bidder announcement returns. We find that the bidder's cumulative abnormal returns are higher in acquisitions where the bidder's corporate governance quality exceeds that of the target. This result suggests a positive valuation effect for bidder shareholders resulting from the portability of good firm corporate governance from bidders to targets. We also find that this effect is stronger when bidders are domiciled in countries with better corporate governance. The results pass several robustness tests, including alternative measures of firm corporate governance and different sample periods.
Journal of Corporate Finance, Sep 1, 2010
... In the empirical analysis shown in the tables, underwriter reputation is measured by theCarte... more ... In the empirical analysis shown in the tables, underwriter reputation is measured by theCarter and Manaster (1990) ranks (henceforth, CM rank or measure). ... For instance, prior to 1985 the ranking comes from Carter and Manaster (1990). ...
RePEc: Research Papers in Economics, 2019
We examine the impact of board gender quota laws on bank risk taking and performance. Using a sam... more We examine the impact of board gender quota laws on bank risk taking and performance. Using a sample of 443 banks from 39 countries between 2008 and 2017, we show that quota laws lead to a significant increase in female board members, though with different qualifications from their male counterparts. We find an increase in risk taking post quota laws for banks with no female directors as of 2008. Finally, we document positive effects (lower risk taking and improved performance) of quota laws in countries with a larger pool of qualified women executives but find opposite effects in other countries.
Social Science Research Network, Nov 1, 2009
... Gilberto Loureiro a * Available online: 01 Sep 2010. ... The effects of board composition and... more ... Gilberto Loureiro a * Available online: 01 Sep 2010. ... The effects of board composition and direct incentives on firm performance. Financial Mgmt , 20: 101–112. [CrossRef], [Web of Science ®] View all references, Byrd and Hickman 19927. Byrd, JW and Hickman, KA. 1992. ...
The first essay of this dissertation tests whether hiring a reputable underwriter to sponsor equi... more The first essay of this dissertation tests whether hiring a reputable underwriter to sponsor equity offerings of foreign firms, that occur when they cross-list on a U.S. stock exchange, is a “reputational bonding” mechanism. In line with the Bonding Hypothesis of Stulz (1999) and Coffee (1999, 2002), I find that foreign firms that cross-list in the U.S. and undertake IPOs are more likely to employ reputable underwriters if the firms come from countries with poor shareholder protection. The additional monitoring provided by reputable underwriters may help overcome the skepticism of U.S. investors, and explains the higher valuation these firms obtain after the offering. There is, however, a price to be paid for this bonding benefit. I find that issuers from countries with low shareholder protection tend to be more underpriced if they are sponsored by prestigious underwriters. In the second dissertation essay, I examine whether the decisions to raise equity and hire a reputable underwriter to conduct the offering impacts the information environment of foreign firms cross-listed on a U.S stock exchange. Using a sample of cross-listed firms from 1980 to 2004, I find that those that raise equity and hire a reputable underwriter, within three years after cross-listing, observe higher analyst coverage and more accurate earnings forecasts.
Quantitative Finance, 2012
... Gilberto Loureiro a * Available online: 01 Sep 2010. ... The effects of board composition and... more ... Gilberto Loureiro a * Available online: 01 Sep 2010. ... The effects of board composition and direct incentives on firm performance. Financial Mgmt , 20: 101–112. [CrossRef], [Web of Science ®] View all references, Byrd and Hickman 19927. Byrd, JW and Hickman, KA. 1992. ...
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Papers by Gilberto Loureiro