Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
961071 | Journal of Financial Intermediation | 2010 | 22 Pages |
Abstract
We investigate how company-level corporate governance practices and country-level legal investor protection jointly affect company performance. We find that in any legal regime there are a few specific governance practices that improve performance. Companies with good governance practices operating in stringent legal environments, however, show a valuation discount relative to similar companies operating in flexible legal environments. At the same time, a stronger country-level regime does not reduce the valuation discount of companies with weak governance practices. Our analysis suggests a threshold level of country development above which stringent regulation hurts the performance of well governed companies or has a neutral effect for poorly governed companies.
Related Topics
Social Sciences and Humanities
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Strategy and Management
Authors
Valentina Bruno, Stijn Claessens,