Essays on Corporate Governance and Asset Pricing
Kalodimos, Jonathan Anthony
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The first chapter of my thesis examines the effect of corporate governance on performance using nonprofit hospitals as an economic environment with muted external governance mechanisms and patient survival of a heart attack as an unambiguous measure of performance. I find that a one standard deviation increase in strength of governance reduces the probability of death by 0.86 percentage points after controlling for patient characteristics. The second chapter of my thesis examines why a stock's market exposure, beta, varies across return frequencies. We provide a risk-based explanation for this frequency dependence of beta by introducing uncertainty about the effect of systematic news on firm value (opacity) into a frictionless model. We document a robust relationship between the frequency dependence of betas and proxies for opacity.