Corporate Governance and Its Political Economy

Roe, Mark J.; Vatiero, Massimiliano

doi:10.1093/oxfordhb/9780198743682.013.50

Cited by 11 publications

(10 citation statements)

References 2 publications

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“…These opportunistic motivations of managers to engage in CSR may lead to excessively high levels of CSR performance from the shareholders' point of view. Managers may also seek to satisfy the interests of some stakeholders, at the expense of shareholder value (Cespa & Cestone, ; Cronqvist, Heyman, Nilsson, Svaleryd, & Vlachos, ; Jensen, ) especially if they feel accountable to stakeholders, or seek to form a coalition to reinforce their position (Cespa & Cestone, ; Jackson, ; Roe & Vatiero, ; Surroca & Tribò, ). In this line, Petrovits () finds evidence of the strategic use of corporate philanthropy programs to achieve earnings targets, by creating earnings reserves, whereas Prior, Surroca, and Tribó () report a positive link between CSR performance and earnings management and claim that managers may use CSR strategically to disguise earnings management.…”

Section: Literature Reviewmentioning

confidence: 99%

Corporate social responsibility and cost of financing—The importance of the international corporate governance system

Desender

LópezPuertas‐Lamy

Pattitoni

et al. 2020

Corporate Governance

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Research Question/Issue: Our study examines whether international corporate governance systems shape the relationship between a firm's engagement in corporate social responsibility (CSR) and their cost of financing (both equity and debt).Research Findings/Insights: Using a large international sample, our findings reveal that although the link between CSR performance and the cost of equity is negative in a shareholder-oriented system, this relationship is positive in a stakeholder-oriented system. Furthermore, the link between CSR performance and the cost of debt is negative for firms that are close to default in both systems.Theoretical/Academic Implications: Our study highlights the importance of considering the shareholder/stakeholder orientation at the country level to explain the link between CSR performance and the cost of financing. Our findings help to explain and place into context the previous mixed findings on the relationship between CSR and the cost of equity and debt and add to the debate about whether CSR is beneficial or detrimental to corporate governance.Practitioner/Policy Implications: The analysis of how the country corporate governance system influences the effect of CSR performance on the cost of financing allows for a deeper understanding of how investors respond to CSR initiatives worldwide and offers managers, directors, and policy makers context-specific recommendations. Our analysis also highlights the limitations of transferring insights regarding CSR from one corporate governance system to another. K E Y W O R D Scorporate governance, corporate social responsibility, cost of debt, cost of equity

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Section: Literature Reviewmentioning

confidence: 99%

Corporate social responsibility and cost of financing—The importance of the international corporate governance system

Desender

LópezPuertas‐Lamy

Pattitoni

et al. 2020

Corporate Governance

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“…Between the citizens and the politicians and between the politicians and the public administration, "some sort of negotiation" takes place "which, if the transitive property is applied, should guarantee a dialectic relationship between public administration and the citizen, albeit mediated by the politician. It is necessary to understand whether this model corresponds to reality" [21] (p. 104), i.e., if the conduct of public administration under the aegis of politics is going to yield government effectiveness, rule of law, and control of corruption [22].…”

Section: The Concept Of Governance and The Public Administrationmentioning

confidence: 99%

Promoting Good Public Governance and Environmental Support for Sustainable Economic Development

Noja

Cristea

Sîrghi

et al. 2019

IJERPH

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Good governance promotes the fundamental grounds of participation and democracy in contemporary public administration, whilst institution building and the (in)effectiveness of public administration is linked to economic growth. This synergy brings forth sheer implications on the sustainable economic development. On this composite setting, the paper examines several fundamental credentials of public administration in the European Union (EU) countries, in relation to economic development, but also poverty, research, and development support, as representative socio-economic credentials. The empirical analysis is based on data covering the 1995–2017 lapse of time, processed through three econometric procedures, namely robust regression, structural equation modeling, and Gaussian graphical models. The main results emphasize that there are significant joint implications of public administration on the considered socio-economic dimensions. General government spending and, particularly, the environmental support, have positive implications on the European Union economies, leading to significant increases in the Gross Domestic Product (GDP) per capita and downsize in poverty risk (more emphasized in regard to the government expenditures than the environmental protection). Overall, the quality of governance in EU countries requires an additional effort dedicated to leverage good public governance in order to support the long-term economic development.

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“…This literature argues that there is a complementarity between armed corporate governance equilibrium and incremental sectors (which involve specific investments, where the term specificity is intended along with Oliver Williamson's contribution) and a complementarity between disarmed corporate governance equilibrium and radical innovation (which relates to general‐purpose investments—cf. Hall and Soskice, ; Pagano, ; Roe and Vatiero, ). In other words, corporate governance structures characterized by high corporate ownership concentration and high labour protection encourage activities with a “modular” step‐by‐step progression (i.e., incremental innovation) and committed assets (i.e., asset‐specificity).…”

Section: Swiss Equilibrium Of Corporate Governance and Innovationmentioning

confidence: 99%

Learning from the Swiss Corporate Governance Exception

Vatiero¹

2017

Kyklos

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Summary The Swiss economy represents an exception to the legal origin theory (e.g., Roe, 2006). Although Switzerland is a country belonging to the civil law family, many of its public companies have diffused corporate ownership, as do those in common law countries. This paper maintains that the Swiss exception relies on the complementarity between corporate ownership and policies addressing employment protection and innovation. The Swiss case presents two lessons. First, the current corporate governance is the result of a long and composite path in which politics plays a pivotal role; second, the institutional differences and similarities across countries, which one would try to explain along with the legal origin theory, can also emerge from politics‐based accounts, such as those referring to policies on employment protection and innovation.

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Corporate Governance and Its Political Economy

Cited by 11 publications

References 2 publications

Corporate social responsibility and cost of financing—The importance of the international corporate governance system

Corporate social responsibility and cost of financing—The importance of the international corporate governance system

Promoting Good Public Governance and Environmental Support for Sustainable Economic Development

Learning from the Swiss Corporate Governance Exception

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