Carlos Fernández Méndez

Ben Bernanke, Douglas Diamond, and Philip Dybvig received the 2022 Nobel Memorial Prize in Economic Sciences for their work in preventing bank collapses. We investigate the cumulative abnormal stock returns of US and European banks around the announcement, analysing shareholder wealth impact. We find a significant positive wealth effect. The positive effect is particularly pronounced for US banks, riskier banks, and those with higher charter values—banks more likely to receive bailouts. Our findings suggest bank shareholders believe they will benefit from the economists' advocacy for public bailouts of distressed banks.

The ubiquitous debate on sustainability practices and the development of a uniform regulation on the use of gender quotas to be implemented in all EU countries by mid-2026 puts these matters in the spotlight. We link both topics by studying the effects board gender diversity and use of gender quota regulations on the firm’s adoption of sustainability practices. Using a panel of listed firms from 22 European countries over the period 2009–2018, we find that firms with gender diverse boards present higher Environmental, Social and Corporate Governance (ESG) scores while the use of quotas attenuates this positive role played by female directors. Our results are robust across econometric models that control for endogeneity. Contrarily to the notion of tokenism, we also find that that the positive effect of gender diversity is observable from the very first female board member. The positive effect of female directors on the firms’ ESG scores correspond to non-executives. Altogether, our results call for further debate on the implementation of positive gender diversity policies, specially concerning the use of quotas with sanctions for non-complaints.

Using the 2022 European Union (EU) “women on boards” directive as a backdrop, we examine its wealth impact on firms in reference to their sustainability scores. Our analysis shows that investors respond positively to the EU gender quota, with a stronger effect on firms with low ESG scores. Particularly, we find that the abnormal returns on the announcement day are 0.5% higher on average for firms with weaker ESG performance, suggesting they have more to gain from the EU quota regulation. Our results reveal also that investors' expectations about the impact of the EU gender quota on ESG performance and firm value vary with differences in the institutional context across European countries. We observe more positive response in countries with strong regulatory environment characterized by high regulatory quality and strong legal enforcement and also in countries aligned with gender equality and sustainability values.

We investigate the effect of women directors on the cost of bank loans for a sample of Australian listed firms during the period 2002-2017. More women on both boards and committees are associated with lower loan spreads, reduced default risk, and improved financial reporting quality. The reduction in loan spread is seen from when the first female director joins the board, and the effect of that is stronger than the effects of additional (second and subsequent) women joining the board. Moreover, women’s leadership status reinforces this effect. Our results are consistent with the idea that female directors exhibit greater risk aversion than male directors, that women are not treated as tokens and are influential—even as a minority group on the board—and that they enhance corporate governance and reporting quality. Investigamos el efecto de las mujeres consejeras en el coste de los préstamos bancarios para una muestra de empresas australianas que cotizan en bolsa durante el período 2002-2017. Un mayor número de mujeres tanto en los consejos de administración como en los comités se asocia con menores diferenciales de los préstamos, un menor riesgo de impago y una mejor calidad de los informes financieros. La reducción del diferencial de los préstamos se observa desde la primera mujer consejera, y resulta más intensa que los efectos asociados a las siguientes (segunda y siguientes) mujeres incorporadas al consejo. Además, el estatus de liderazgo de la mujer refuerza este efecto. Nuestros resultados son coherentes con las nociones de que las mujeres consejeras muestran una mayor aversión al riesgo que los hombres consejeros, que las mujeres no son tratadas como simbolo siendo influyentes incluso como grupo minoritario en el consejo y que mejoran el gobierno corporativo y la calidad de la información.

This paper analyses the influence of large controlling shareholders on the terms of bank loans for a sample of 984 loans to 261 non-financial Spanish public and private firms over the period 2001-2017. The results show that the presence of large controlling shareholders increases the interest rate spread of bank loans only in public firms, whereas the influence is insignificant for private firms. Similarly, a less evenly balanced distribution of ownership among large shareholders is associated with higher loan spreads for public firms. Our results reveal that large controlling shareholders expropriate wealth from other investors in public firms, in line with the existence of lower benefits for borrowers due to having large controlling shareholders when they have other internal and external mechanisms of control. El objetivo del presente trabajo consiste en analizar la influencia que los grandes accionistas tienen sobre las condiciones de los préstamos bancarios para una muestra compuesta por 984 préstamos realizados a 261 empresas cotizadas y no cotizadas españolas no financieras durante el periodo 2001-2017. Los resultados muestran que la presencia de grandes accionistas incrementa el tipo de interés pagado por los préstamos en el caso de las empresas cotizadas, mientras el efecto no es significativo para las empresas no cotizadas. De forma similar, una distribución de la propiedad menos equilibrada entre los grandes accionistas está asociada con un mayor tipo de interés pagado por las empresas cotizadas. Los resultados ponen de manifiesto que los grandes accionistas expropian riqueza de otros inversores en las empresas cotizadas, en línea con la existencia de menores beneficios para los prestatarios de la existencia de grandes accionistas cuando disponen de otros mecanismos, tanto internos como externos, de control.

This paper analyses the influence of female directors on the demand for audit effort and on financial reporting quality for a sample of Australian non-financial listed firms over the period 2004–2018. Our results suggest that gender diversity at the Board and the audit committee have a beneficial impact both on the demand of audit effort and on the outcomes of the audit process. This beneficial effect of female directors is attributable to non-executive directors. Long tenured and busy female directors and women chairing the board or the audit committee are revealed as especially influential at improving audit efforts and outcomes. We obtain further indication that audit effort and reporting quality improve from the first women added to the board not being necessary to attain a certain critical mass to generate these effects. Also, gender diversity improves the external auditor independence though the presence of lower of non-audit fees. The results are robust to endogeneity corrections. Evidence from the Australian market provides a positive argument for small and mid-cap Australian listed firms to follow the path of large Australian listed firms towards gender diversity.

We study the effects of family control on CEO pay from the perspective of behavioral agency model (BAM), with particular focus on family firm’s generational stage and CEO family ties. Using a panel of Australian listed firms, we find that family firms present lower total and variable CEO pay, showing also less pay disparity between the CEO and other top executives. We also find that multi-generational family firms and those run by non-family CEOs offer higher total and variable CEO pay and present high pay disparity. The BAM and family’s aversion to socioemotional wealth loss can explain the effects of family control based on the pursuing of non-financial family goals. The decline of these goals derived from the aging of the firm and the hiring of external CEOs shape family control and should be considered in the design of executive compensation policies and by external parties when assessing their suitability. JEL CLASSIFICATION: G30; G32; G34; G38

This paper analyzes the influence of large bank shareholders on the terms of bank loans for a sample of 12,045 loans to 3,290 borrowers from 45 countries over the period 2004–2013. We investigate the effects of bank control over bank loan terms during the global financial crisis, regardless of whether the bank shareholder is a lender or not. In line with a monitoring effect, the results suggest that firms with bank shareholders that are non‐lenders borrowed at lower interest rates and longer maturities during the period of crisis. However, borrowers paid higher spreads and were offered shorter maturities when they borrowed from banks that are also shareholders. This effect is consistent with banks obtaining private benefits as large shareholders as a consequence of the informational hold‐up problems affecting borrowers.

This paper examines the effects of family control on a firm’s adoption of sustainability practices, with special attention given to the heterogeneity of the family business derived from the generational stage of the company. Using a panel of 166 Australian companies listed between 2011 and 2018, we found that family businesses have lower sustainability scores compared to non-family businesses, according to the predictions of the socioemotional wealth (SEW) approach. For a subsample of family businesses, we found that multi-generational family businesses score better on sustainability than firms managed by the founders (first-generation). The SEW perspective could explain the effects of family control based on the pursuit of non-economic goals and the higher risk-aversion of family businesses. The decline in non-economic goals resulting from the ageing of the company stimulates the adoption of better sustainability practices. The generational stage of a family business could be a moderator of the relationship between family control and the adoption of sustainability practices and is a central element in explaining the disparity in the sustainability policies within family businesses.