Empirical studies in law and finance of public and private firms.

摘要

This dissertation consists of three empirical studies in law and finance of public and private firms. The first essay examines the impact of stock exchange trading rules on market liquidity using data from 42 markets. We examine stock exchange trading rules for market manipulation, insider trading, and broker-agency conflict, across countries and over time, in 42 stock exchanges around the world. Some stock exchanges have extremely detailed rules that explicitly prohibit specific manipulative practices, but others use less precise and broadly framed rules. We create new indices for market manipulation, insider trading, and broker-agency conflict based on the specific provisions in the trading rules of each stock exchange. We show that detailed market integrity rules facilitate liquidity. Our evidence also shows that changes pursuant to MiFID have further promoted liquidity on European exchanges.;The third essay examines business starts and deaths in relation to U.S. public policy. Controlling for venture capital, economic conditions, bankruptcy laws, and other factors, and using the most recent U.S. state level census data which covers the 1995-2005(Q1) period, we find robust evidence of more business starts with 1-4 employees in states with fewer government transfers, lower taxation, and lower minimum wages. Transfers and subsidies are associated with fewer business deaths. The data indicate business starts with over 10 employees are unrelated to government subsidies and taxation but do show a strong negative relation with labor frictions. Apart from the quantity of business creation, proxies for the quality of entrepreneurial activities show government policy in a more favorable light in terms of a positive effect associated with government transfers and subsidies.;The second essay investigates insider trading in acquiring firms' stocks. Specifically, we examine whether there is pre-announcement movement of an acquirer's share price and trading volume prior to the announcement of acquisitions in ways consistent with insider trading. Prior papers focus on insider trading of a target's stock; our paper differs by examining for the first time run-up of acquirer stock, and considers both public and private acquisitions, including private-equity backed acquisitions. Acquisition announcements generate predictable movements in the price of the acquirer's stock. Pre-announcement trading of acquirer's stock is more likely to be attributable to insider trading when the pre-announcement price changes match the expected post-announcement acquirer returns. Based on a sample of Canadian acquirers and public and private acquisition targets from Canada, the U.S. and 31 other countries over the years 1991-2008, we find evidence consistent with insider trading of acquirer's stock. This evidence, however, is limited to specific situations and is far from generalizable to all types of acquisition announcements. Our findings have policy implications for the allocation of surveillance efforts for initiating insider trading investigations.