This page has only limited features, please log in for full access.
One of the main controversial aspects of sustainability metrics relies on the accuracy, transparency, and reliability of the information at the basis of environmental, social and governance (ESG) scores. This paper investigates whether firms that have their ESG reporting audited by independent firms exhibit a higher quality of ESG scores. We performed an analysis investigating the change in ESG scores following the unveiling of a corporate misconduct. We documented that, overall, no significant ESG score adjustment occurs after the scandal becomes public, thus, implying that rating agencies provide an accurate interpretation of the firm’s sustainability. However, our results differed when we distinguished between audited and unaudited reports. Firms whose reports are audited by third parties did not exhibit significant changes in their scores after a scandal, whereas for companies whose reports are not audited, we detected a worsening of the ESG scores that are statistically significant. Our findings were also confirmed in a multivariate analysis. Overall, our results suggest that the reliability of ESG scores can benefit from the auditing of sustainability reporting by third parties, which has an assurance effect on the quality of the company’s ESG information.
Alfonso Del Giudice; Silvia Rigamonti. Does Audit Improve the Quality of ESG Scores? Evidence from Corporate Misconduct. Sustainability 2020, 12, 5670 .
AMA StyleAlfonso Del Giudice, Silvia Rigamonti. Does Audit Improve the Quality of ESG Scores? Evidence from Corporate Misconduct. Sustainability. 2020; 12 (14):5670.
Chicago/Turabian StyleAlfonso Del Giudice; Silvia Rigamonti. 2020. "Does Audit Improve the Quality of ESG Scores? Evidence from Corporate Misconduct." Sustainability 12, no. 14: 5670.
We investigate the cash holdings policy of family firms and examine potential value implications. Family firms hold more cash than other firms, with an average difference of 2.3% of total assets. This result is driven by firms managed by heir CEOs. While the cash holdings policy of first‐generation family firms is more sensitive to firm risk, consistent with founders’ increased risk aversion, that of later‐generation firms is more sensitive to information asymmetry and agency conflicts. Heir CEOs’ cash policies destroy value, as the marginal value of an additional euro suffers from a 38.3‐cent discount, on average, relative to non‐family firms. This article is protected by copyright. All rights reserved.
Lorenzo Caprio; Alfonso Del Giudice; Andrea Signori. Cash holdings in family firms: CEO identity and implications for firm value. European Financial Management 2019, 26, 386 -415.
AMA StyleLorenzo Caprio, Alfonso Del Giudice, Andrea Signori. Cash holdings in family firms: CEO identity and implications for firm value. European Financial Management. 2019; 26 (2):386-415.
Chicago/Turabian StyleLorenzo Caprio; Alfonso Del Giudice; Andrea Signori. 2019. "Cash holdings in family firms: CEO identity and implications for firm value." European Financial Management 26, no. 2: 386-415.
The adoption of the European directive for Markets in Financial Instruments Directive (MiFID, Law n. 164/2007) introduced a change in Italian securities laws. The MiFID’s key objectives are market efficiency, integrity and fairness. The directive introduced measures to increase the market integration and liquidity of secondary markets to reach efficiency and integrity goals. In turn, banks and financial firms are asked to operate according to a general duty of fairness and honesty, with particular attention to the identification, prevention, management and disclosure of conflicts of interest. These rules should improve investor protection in the Italian financial market, which is historically characterized by a lower degree of market competition and a lower level of investor education. I collected financial information from 1283 bank bond prospectuses issued in the 2005–2010 period. I found that before MiFID adoption, bank bonds were issued at a negative spread with respect to the comparable risk-free rate, thus violating the diligence and fairness duties of the banks while acting as protective gatekeepers for their customers. After MiFID adoption, the bank bond spread became positive. However, investor protection was enhanced because of the higher competition in the bond market rather than because of the higher public surveillance of the fairness duties of the issuers.
Alfonso Del Giudice. Impact of the Market in Financial Instruments Directive (MiFID) on the Italian financial market: Evidence from bank bonds. Journal of Banking Regulation 2016, 18, 256 -267.
AMA StyleAlfonso Del Giudice. Impact of the Market in Financial Instruments Directive (MiFID) on the Italian financial market: Evidence from bank bonds. Journal of Banking Regulation. 2016; 18 (3):256-267.
Chicago/Turabian StyleAlfonso Del Giudice. 2016. "Impact of the Market in Financial Instruments Directive (MiFID) on the Italian financial market: Evidence from bank bonds." Journal of Banking Regulation 18, no. 3: 256-267.
Using a novel European data set, we investigate the role of controlling shareholders in delisting decisions. Minority shareholders earn lower abnormal returns when the controlling shareholder takes the company private, but this lower premium disappears when we control for the firm's characteristics. After the delisting, firms delisted by their controlling shareholders do not improve their operating performance. These results do not suggest that controlling shareholders expropriate minority investors with minority freeze‐outs. Our findings are not due to heterogeneity across controlling shareholders. In fact, when we focus on family controlling shareholders, we find no evidence of performance improvement after the delisting.
Ettore Croci; Alfonso Del Giudice. Delistings, Controlling Shareholders and Firm Performance in Europe. European Financial Management 2012, 20, 374 -405.
AMA StyleEttore Croci, Alfonso Del Giudice. Delistings, Controlling Shareholders and Firm Performance in Europe. European Financial Management. 2012; 20 (2):374-405.
Chicago/Turabian StyleEttore Croci; Alfonso Del Giudice. 2012. "Delistings, Controlling Shareholders and Firm Performance in Europe." European Financial Management 20, no. 2: 374-405.
We investigate how ownership and family control influence the decision to take part in M&As as an acquirer or as an acquired company in a sample of 777 large Continental European companies in the period 1998–2008. We find that ownership is negatively correlated with the probability of launching a takeover bid, and family firms are less likely to make acquisitions, especially when the stake held by the family is not large enough to assure the persistence of family control. On the passive side of M&A deals, the effect of the largest shareholders' ownership on the decision to accept an acquisition proposal depends non-linearly on the voting rights they hold, and family control reduces the probability of being acquired by an unrelated party. We do not find evidence that family-controlled firms destroy wealth when they acquire other companies. Finally, we document that ownership and family control, while being negatively correlated with M&A activity, are not negatively correlated with growth in firm size.
Lorenzo Caprio; Ettore Croci; Alfonso Del Giudice. Ownership structure, family control, and acquisition decisions. Journal of Corporate Finance 2011, 17, 1636 -1657.
AMA StyleLorenzo Caprio, Ettore Croci, Alfonso Del Giudice. Ownership structure, family control, and acquisition decisions. Journal of Corporate Finance. 2011; 17 (5):1636-1657.
Chicago/Turabian StyleLorenzo Caprio; Ettore Croci; Alfonso Del Giudice. 2011. "Ownership structure, family control, and acquisition decisions." Journal of Corporate Finance 17, no. 5: 1636-1657.