Challenges for corporate governance at the national and firm levels

Guedhami, Omrane; Johan, Sofia; López-de-Silanes, Florencio; Terjesen, Siri

doi:10.1111/corg.12420

Cited by 5 publications

(2 citation statements)

References 46 publications

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“…Hence, our analysis is not immediately generalizable to the USA, which has more diffuse ownership. A replication of this study in other contexts, such as the USA, would allow investigation of whether our results are influenced by these different institutional characteristics (Guedhami et al ., 2022). Our second boundary condition is the study of IPO firms.…”

Section: Discussionmentioning

confidence: 99%

Too Much of a Good Thing? Board Independence and the Value of Initial Public Offerings

Bertoni

Meoli

Vismara

2022

British J of Management

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Building on agency and resource dependence theories, we study the relationship between the value of initial public offerings and the extent of board independence, which we find to be an inverted U-shape: beyond a certain threshold, board independence becomes excessive. Consistent with agency theory, the inverted U-shaped relationship is more pronounced when ownership and control rights are separated. Consistent with resource dependence theory, the inverted U-shaped relationship is more pronounced in companies with higher industry diversification and less pronounced when the roles of the CEO and president of the board of directors are separated.

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Section: Discussionmentioning

confidence: 99%

Too Much of a Good Thing? Board Independence and the Value of Initial Public Offerings

Bertoni

Meoli

Vismara

2022

British J of Management

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“…Our study follows from a general call for more studies investigating the role of ownership types and structures on corporate governance and, by extension, to firm and investor characteristics. Guedhami et al (2022) highlight that investigating the impact of ownership structure and ownership type is challenging in corporate governance studies. From a corporate governance perspective, studying how ownership structure affects firms is currently very important (Castañer et al, 2022).…”

Section: Introductionmentioning

confidence: 99%

Collusion or governance? Common ownership and corporate risk‐taking

Yao,

Guo,

Sensoy

et al. 2023

Corporate Governance

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Research QuestionDisputes over the corporate governance impacts of common ownership continue. Differentiating from existing studies, we focus on the Chinese stock market, exploiting the Top 10 Shareholding File, which includes various investors besides institutional investors, to study the impact of common ownership built through blockholders on corporate risk‐taking behavior.Research FindingsWe find that firms with higher common ownership are less likely to engage in corporate risk‐taking, with concomitant decreases in future growth rates. Mechanism analysis shows that blockholders' common ownership exerts its influence through increasing market concentration, with concomitant lessening of market competition. Interestingly, further analyses indicate that, in contrast to blockholders, ownership connectedness built by mutual fund families significantly raises corporate risk‐taking along with growth. However, individual investors' common ownership does not show the significant statistical relationship with corporate risk‐taking.Theoretical ImplicationsWe add to the debate on common ownership on corporate governance. Consistent with the anti‐competition stream of literature, the risk‐taking‐reduction role we identify for blockholder common ownership supports the theory of anti‐competition. Our results highlight the need to consider the heterogeneity of common ownership.Policy ImplicationsWhile blockholder common ownership is evidenced to have a negative effect on corporate risk‐taking, with, by extension, a negative impact on economic development, our results also suggest that efficient monitoring mitigates these effects. We also document an interesting heterogeneity in investor types. Mutual fund common ownership, in contrast to blockholder common ownership, is associated with higher risk‐taking and more robust firm growth. This suggests the positive role of institutions in corporate governance and the necessity of considering the heterogeneity of common ownership.

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