Skip Navigation


Journal of Economic Geography Advance Access originally published online on November 25, 2005
Journal of Economic Geography 2006 6(3):303-322; doi:10.1093/jeg/lbi018
This Article
Right arrow Full Text
Right arrow Full Text (PDF)
Right arrow All Versions of this Article:
6/3/303    most recent
lbi018v1
Right arrow Alert me when this article is cited
Right arrow Alert me if a correction is posted
Services
Right arrow Email this article to a friend
Right arrow Similar articles in this journal
Right arrow Alert me to new issues of the journal
Right arrow Add to My Personal Archive
Right arrow Download to citation manager
Right arrowRequest Permissions
Google Scholar
Right arrow Articles by Clark, G. L.
Right arrow Articles by Bauer, R.
Right arrow Search for Related Content
Related Collections
Right arrow F23 - Multinational Firms; International Business
Right arrow F36 - Financial Aspects of Economic Integration
Right arrow G12 - Asset Pricing; Trading volume; Bond Interest Rates
Right arrow G14 - Information and Market Efficiency; Event Studies
Right arrow G15 - International Financial Markets
Right arrow G32 - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure
Right arrow G34 - Mergers; Acquisitions; Restructuring; Corporate Governance
Right arrow M14 - Corporate Culture; Social Responsibility
Social Bookmarking
Add to CiteULike   Add to Connotea   Add to Del.icio.us  
What's this?


© The Author (2005). Published by Oxford University Press. All rights reserved. For Permissions, please email: journals.permissions@oxfordjournals.org

Geographically dispersed ownership and inter-market stock price arbitrage—Ahold's crisis of corporate governance and its implications for global standards

Gordon L. Clark***, Dariusz Wójcik*** and Rob Bauer****

* Oxford University Centre for the Environment, South Parks Road, Oxford OX1 3QY, UK. email: gordon.clark{at}ouce.ox.ac.uk
** Labor and Worklife Program, Harvard Law School, Cambridge, MA 02138, USA. email: gordon.clark{at}ouce.ox.ac.uk
*** Jesus College, Turl Street, Oxford OX1 3DW, UK. email: dariusz.wojcikpouce.ox.ac.uk
**** LIFE, Maastricht University, P.O.Box 616, 6200 MD Maastricht, The Netherlands. email: r.bauer{at}abp.nl

Scandals of corporate governance in the United States and Europe in the aftermath of the TMT bubble captured the public imagination. In play were the interests of senior executives in relation to investors, prompting debate over countries' standards of corporate governance in the global market place. Ahold was (and is) an especially important instance, involving significant internal accounting and reporting failures and poor public disclosure of market-sensitive information. Ahold is also a global corporation cross-listed on major financial markets. In this paper, we report the analysis of market trading in Ahold stock between Amsterdam and New York. It is shown that greater volatility in Amsterdam daily closing prices presaged the crisis to come in Ahold shares implying leakage of information to privileged local insiders. It is also shown that in the aftermath of Ahold's crisis, management responded to the lack of global investor confidence by improving transparency and governance standards consistent with the expectations of global investors. Implications are drawn for the pricing of corporate governance and the process of convergence in national standards of corporate governance. The continuity of different regimes of governance is subject to inter-market arbitrage especially if corporations seek to maintain and enhance their reputations in the global financial market place.

Keywords: Cross-listing, inter-market arbitrage, institutional investors, standards of corporate governance,
JEL classifications: F36, G14, G15, G32
Date submitted: 6 June 2005     Date accepted: 6 October 2005


Add to CiteULike CiteULike   Add to Connotea Connotea   Add to Del.icio.us Del.icio.us    What's this?


This article has been cited by other articles:


Home page
 J ECON GEOGRHome page
C. C. Okeahalam and S. Wood
Financing internationalisation: a case study of an African retail transnational corporation
J. Econ. Geogr., July 1, 2009; 9(4): 511 - 537.
[Abstract] [Full Text] [PDF]

Home page
 J ECON GEOGRHome page
R. Bauer, R. Braun, and G. L. Clark
The emerging market for European corporate governance: the relationship between governance and capital expenditures, 1997-2005
J. Econ. Geogr., July 1, 2008; 8(4): 441 - 469.
[Abstract] [Full Text] [PDF]

Home page
 J ECON GEOGRHome page
N. M. Coe and N. Wrigley
Host economy impacts of transnational retail: the research agenda
J. Econ. Geogr., July 1, 2007; 7(4): 341 - 371.
[Abstract] [Full Text] [PDF]

Home page
 J ECON GEOGRHome page
M. Palmer and P. O'Kane
Strategy as practice: interactive governance spaces and the corporate strategies of retail transnationals
J. Econ. Geogr., July 1, 2007; 7(4): 515 - 535.
[Abstract] [Full Text] [PDF]


Disclaimer: Please note that abstracts for content published before 1996 were created through digital scanning and may therefore not exactly replicate the text of the original print issues. All efforts have been made to ensure accuracy, but the Publisher will not be held responsible for any remaining inaccuracies. If you require any further clarification, please contact our Customer Services Department.