National Chiao Tung University,National Chi Nan University
Abstract:
The purpose of this empirical study is to investigate the association between corporate governance and the individual sensitivity to market sentiment. The main argument is to examine whether individual sentiment sensitivity is affected by the change of external corporate governance mechanism. The empirical evidence shows that the individual sentiment beta is inversely associated with G index. The evidence from Newey-West standard errors estimation provides the same support for the robustness. It implies that when the antitakeover provisions are less taken by a firm, it signals openness to the market and attracts the merger arbitraging institutions to provide more informative trading. The noisy trading behaviors are also active correspondingly.
