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Discussant: Hsiangping Tsai College of Management Yuan Ze University

Comments on Will Deregulation Affect the Structure of Corporate Governance? Evidence form the Deregulation of US Trucking and Telecommunication Industries. Discussant: Hsiangping Tsai College of Management Yuan Ze University. Main Idea and Contributions. Main idea

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Discussant: Hsiangping Tsai College of Management Yuan Ze University

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  1. Comments onWill Deregulation Affect the Structure of Corporate Governance? Evidence form the Deregulation of US Trucking and Telecommunication Industries Discussant: Hsiangping Tsai College of Management Yuan Ze University

  2. Main Idea and Contributions • Main idea • Do deregulation affects the market competition and the corporate governance structure? • Deregulation → shareholders no longer rely on the regulators to monitor the firm (agency problem) • Deregulation → change in market competition (substitute or complement to takeover defenses (i.e., CG structure) • Contribution • Deregulation does not promise ‘increased competition’ • Trucking (lower) vs. telecommunication (higher) • Deregulation may not help improve overall CG structure • Trucking: ownership concentration • Telecommunication: increased CEO pay, reduced anti-takeover provision

  3. Comments and Suggestions • Anti-take over provision • Bebchuk et al. (RFS,2009)-What Matters in Corporate Governance • The G-index has noisy information • Six anti-takeover amendments are used to form the entrenchment index (E index): • (1) staggered board, • (2) limitation on amending by laws, • (3) limitation on amending the charter, • (4) supermajority to approve a merger, • (5) Golden parachute, • (6) Poison pill

  4. Comments and Suggestions • Info about the overall governance factor score • Summary statistics • the relations between it and other governance variables • Maybe a correlation between it and firm performance help convince readers that this score is a good proxy for a firm’s overall governance structure.

  5. Comments and Suggestions • The effect of HHI on GOV after deregulation • How about adding HHI*Dummde*Truck/Telecom

  6. A Question • Do these two industries have regulation change around 2003-2004?

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