In today’s briefing:
- Engagement Keeps Widening the Profitability Gap Between the Top and Bottom Companies in Market Cap
Engagement Keeps Widening the Profitability Gap Between the Top and Bottom Companies in Market Cap
- Companies with larger market capitalizations tend to have higher profitability and valuations, and those companies have higher foreign ownership.
- Given that board practices improved and that valuations, highly correlated with foreign ownership, are higher for companies with larger market capitalizations, this can be due to engagement of overseas investors.
- If this hypothesis is correct, the gap between the top and bottom market capitalization companies will widen further as it takes a certain time for engagement to pay off.
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