1. Topics for Master Thesis Research Yulia Ilina Asc. Prof. Department of Finance and Accounting

2. Fields of Research Corporate governance and corporate finance Financial markets and institutions

3. Corporate governance and corporate finance Corporate governance, financial performance and companies disclosure Board of directors and financial performance Companies organizational form changes: impact of corporate governance and financial performance

4. Corporate Governance Corporate governance – economic, legal and institutional framework in which corporate control and cash flow rights are distributed among shareholders, managers, and other stakeholders of the company (for detailed discussion see Eun C., Resnick B. International Financial Management. McGraw Hill, 2007. Chapter 4)

5. Disclosure (transparency) – the voluntary disclosure of information about the company in exceed of what is prescribed by the legislation Corporate governance, financial performance and companies disclosure (transparency)

6. Research ideas Exploring relationships between company’s financial performance (and other corporate determinants) and the level of corporate disclosure (transparency). Identifying major determinants of the corporate voluntary disclosure Hypotheses: 1. The high level of disclosure (transparency index) could positively affect the financial performance. 2. The high level of corporate governance mechanisms (high corporate governance rating) could positively affect the level of transparency of the company.

7. Corporate governance, financial performance and disclosure Existing research: Parsa S., Chong G., and Isimoya E. 2007. Disclosure of governance information by small and medium-sized companies // Corporate Governance 7 (5): 635-648. (examines the extent of compliance with the governance regulatory requirements by small and medium-sized companies (SMEs) listed on the alternative investment market (AIM)).

8. Corporate governance and disclosure: existing research Huafang X., Gianguo Y. 2007. Ownership structure, board composition and corporate voluntary disclosure. Evidence from listed companies in China. Managerial Auditing Journal 22 (6): 604-619 (the paper studies how corporate governance factors impact the voluntary disclosure of Chinese companies) Liu J., Eddie I. 2007. Determinants of disclosure of A-, B- and H- share companies. Asian Review of Accounting 15 (1): 72-92 (examines the issues relating to corporate financial reporting of Chinese listed companies under specified institutional settings, associations are hypothesized and tested between the level of corporate disclosure and the following corporate determinants: company size, profitability, auditor, leverage, industry and ownership structure).

9. Corporate governance and disclosure: existing research Бухвалов А.В., Ильина Ю.Б., Бандалюк О.В. Электронное корпоративное управление: учет интересов стейкхолдеров // Вестник СПбГУ. Серия Менеджмент. Вып.1. 2007 (examines the specifics of companies transparency in different national models of corporate governance)

10. Corporate governance and board of directors performance Research idea: The impact of board composition, board structure, board performance on company’s financial performance

11. Corporate governance and board of directors performance: existing research Dulewicz V., Herbert P. 2004. Does the Composition and Practice of Boards of Directors Bear Any Relationship to the Performance of Their Companies? Corporate Governance: International Review 12 (3): 263-280. Examples of hypotheses tested: H1. Where the roles of Chairman and CEO are separated (combined), company performance will be higher. H2. A higher proportion of outside directors (executive directors) on the board leads to higher company performance. H3. Larger (smaller) boards companies will have higher company performance.

12. Corporate governance and board of directors performance: existing research Weir C., Laing D. 2003. Ownership structure, board composition and the market for corporate control in the UK: an empirical analysis / Applied Economics (35): 1747–1759 (analyses the board composition and ownership structures of a sample of companies that have been acquired and those of a matching control sample that have not. There is significant governance differences between acquired firms and the control sample. Firms with the following characteristics were more likely to be acquired: they had the same person acting as CEO and Chair, a higher proportion of non- executive directors, larger institutional shareholdings and higher director shareholdings).

13. Corporate governance and board of directors performance: existing research Bǿren Ǿ., Strǿm R. 2006. Aligned, informed, and decisive: characteristics of value-creating boards/ Working Paper. BI Norwegian School of Management. (examines the relationship between the board composition and companies performance in Norway. Find that performance improves when directors own equity in the firm, have wide information networks to other firms, and when the board has low gender diversity, no employee directors, and small size)

14. Companies organizational form changes: impact of corporate governance and financial performance Research idea: to study the relationship between the change of organizational form of business and corporate governance and financial performance factors Hypotheses: Hypothesis 1. Most Russian open and closed JSCs are homogeneous regarding the issue of changing organizational form of business. Hypothesis 2. Corporate governance and control factors could affect the possibility of organizational form change. Hypothesis 3. Company financial performance may affect the decision on changing the organizational form of business.

15. Березинец И.В., Ильина Ю.Б. 2008. Изменение организационно-правовой формы российских компаний: взаимосвязь с финансовыми результатами деятельности. Вестник С.- Петербургского университета. Сер. Менеджмент (1): 31-52. Companies organizational form changes: impact of corporate governance and financial performance

16. Existing research Damodaran A., John K., Liu C. 1997. The Determinants of Organizational Form Changes: Evidence and Implications from Real Estate. Journal of Financial Economics (45): 169−192. Damodaran A., John K., Liu C. 2005. What Motivates Managers? Evidence from Organizational Form Changes. Journal of Corporate Finance (12): 1−26.

17. Financial markets and institutions American Depository Receipts (ADRs) Initial Public Offerings (IPO) Mutual funds performance

18. American Depositary Receipts ADR — negotiable instrument, issued by US depositary bank, representing shares of non-US company. Issued to allow foreign company to list its shares at the US stock market

19. American Depositary Receipts Research ideas: The impact of ADR’s issue (cross- listing) on the company’s position at the national stock market

20. American Depositary Receipts: existing research Benninga S., Helmantel, M,. and S. Oded. 2005. The timing of initial public offerings. Journal of Financial Economics 75:115-132. Doidge, C., Karolyi, A., and R. Stulz. 2004. Why are foreign firms listed in U.S. worth more? Journal of Financial Economics 71:205-238. Karolyi, A. 2004. The role of American depository receipts in the development of emerging equity markets. The Review of Economics and Statistics 86(3): 670-690.

21. Initial Public Offering (IPO) Initial Public Offering – first-time offering of shares by a specific firm to the public. Key success factor for an IPO - correctly pricing the offering

22. What’s going on with shares at the first trading day after the IPO? Increase in price What does it mean for the company doing IPO? Looses money “Money left on the table” Number of shares issued times the change from the offer price to the first day closing price

23. IPO pricing and aftermarket The initial return Initial (first-day) return: Was especially high for Internet firms during 1996-1999 (84% on average in 1998) Example. On January 15, 1999, an IPO by an Internet stock called Market Watch.com jumped from the initial offer price of $17 per share to $130 per share within the first two hours of trading (665% return) and then declined to $97.50 per share by the end of the day (declined to less than $3 within a few years).

24. Russian companies IPOs Stock exchange CompanyFirst day returnYear NYSEVimpelcom+41,4%1996 MobileTeleSystems+4%2000 Wimm Bill Dann+15,8%2002 Mechel Steel-2%2004 NASDAQGolden Telecom-11,5%1999 LSEAFK Systema+5,5%2005 Evraz Holding-3,4%2005 Novatek+13%2005 Amtel-Fredershtein-1,3%2005 AIMHighland Gold Mining+5%2002 Peter Hambro Mining+6%2002 Urals Energy+4,2%2005 Rambler Media+12,92005 International Marketing & Sales Group +0,8%2005

25. Initial Public Offering (IPO) Research ideas: Factors affecting the IPO decision – corporate governance, financial performance Factors affecting underpricing (first day initial return) Entrepreneurial IPOs

26. Initial Public Offering (IPO): existing research Filatotchev I. 2006. The effects of executive characteristics and venture capital involvement on board composition and share ownership in IPO firms. British Journal of Management (17): 75-92. (paper examines factors affecting board selection and share ownership in initial public offerings (IPOs).

27. Initial Public Offering (IPO): existing research Chanine S., Filatotchev I., Wright M. 2007. Venture capitalists, business angels, and performance of entrepreneurial IPOs in the UK and France. Journal of Business, Finance and Accounting 34 (3-4): 505-528. (this paper analyses factors determining the underpricing of entrepreneurial IPOs – corporate governance and financial performance)

28. Initial Public Offering (IPO): existing research Derrien F. 2005. IPO pricing in “hot” market conditions: who leaves money on the table? Journal of Finance. 60:487- 521 (the paper explores the impact of investor sentiment, individual investors and institutional investors demand for IPO shares, affecting IPO pricing, initial returns, long-run performance).

29. Mutual fund – financial institution, that issues shares and invests the proceeds in assets portfolio. Mutual funds performance

30. Mutual funds: research ideas Research ideas: Factors affecting the demand for investments in mutual funds (return on investments, fund’s rating, size etc.) Measuring fund’s performance - comparative analysis for different countries

31. Kothari S.P., Warner J.B. 2001. Evaluating mutual fund performance. The Journal of Finance. 56 (5): 1985-2010. (examine different performance measures) Pollett J., Wilson M. 2008. How does size affect mutual fund behavior? Journal of Finance. Vol. 63. Issue 6: 2941-2969. (Authors found that although asset growth has little effect on the behavior of the typical fund, large funds and small-cap funds diversify their portfolios in response to growth. Greater diversification, especially for small-cap funds, is associated with better performance). Mutual funds: existing research