Empirical literature on corporate governance often assumes independence among different control mechanisms. However, different studies in the Anglo-Saxon context find that control mechanisms are interrelated. The Spanish corporate governance system, unlike the Anglo-Saxon one, is characterised by the dominance of internal controls, mainly the stock ownership concentration and the board of directors. In this internal control context, we specifically analyse the possible substitution of the supervisory potential of the board outsiders by the incentive effects derived from managerial stock ownership and the supervisory role of large shareholders. Our main results show a negative relationship between the proportion of outside directors and managerial and large blockholders' ownership stake. These findings support the substitution among internal controls and suggest that Spanish firms form an efficient conglomerate of managerial controls, in which deficiencies in a single mechanism can be compensated by the action of an alternative one. Copyright Blackwell Publishing Ltd 2005.

This paper explores the relationship between the practices of good governance and the quality of life at the municipal level in Spain. A composite indicator of the quality of life of 393 Spanish municipalities in 2011 is estimated using varied statistical information. For this purpose, we follow a benefit of the doubt approach based on Data Envelopment Analysis. Then three dimensions of good governance are considered: transparency, participation, and accountability. The results show a significant positive relationship between quality of life and participation and financial accountability. However, transparency seems to be unrelated to quality of life.

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The ability of asymmetric informational models and agency models is analysed to explain the firm's security issue choice and the market reaction to equity and bond issues. The results support mainly agency models as an explanation for the firm's decisions to issue debt or equity, while the market reaction to equity issues is both explained by models of asymmetry of information and agency models. The study also highlights the importance of considering different contexts when analysing capital structure decisions.