Law, finance, and the international mobility of corporate governance

Abstract

We introduce the topic of this Special Issue on the ''Role of Financial and Legal Institutions in International Governance'', with a particular emphasis on a notion of ''international mobility of corporate governance''. Our discussion places the Special Issue at the intersection of law, finance, and international business, with a focus on the contexts of foreign investors and directors. Country-level legal and regulatory institutions facilitate foreign ownership, foreign directors, raising external financial capital, and international M&A activity. The interplay between the impact of foreign ownership and foreign directors on firm governance and performance depends on international differences in formal/regulatory institutions. In addition to legal conditions, informal institutions such as political connections also shape the economic value of foreign ownership and foreign directors. We highlight key papers in the literature, provide an overview of the new papers in this Special Issue, and offer suggestions for future research.

Institutional Voids and Organization Studies: Towards an epistemological rupture

“…Recent scholarship in top management journals continues to uncritically promote emulation of Western market and corporate governance institutions. Cumming et al (2017) coin the term 'governance mobility' to promote the export of Western corporate governance rules to fill institutional voids. The authors propose that '[p]olicymakers should work to encourage mobility of governance' with support from 'international financial institutions, such as the IMF and World Bank [who] can be transmission sources of governance for developing economies' (Cumming et al, 2017).…”

Management control in born-global firms: a case study

“…Some authors (Cumming, Filatotchev, Knill, Reeb, & Senbet, 2017;Ismail, 2013;Lin, Chen & Lin, 2017;Puck & Filatotchev, 2018;Roque, Alves, & Raposo, 2019b, 2019cTessier & Otley, 2012) have encouraged further study which might aim to understand how MACS can assist firms in strategy implementation. Therefore, this paper presents two questions: (1) how does a company's MACS facilitate (or not) the implementation of a born-global internationalisation model (BGIM); and (2) how has the BGIM implementation involved (or not) changes in the MACS (and, if so, which?).…”

Converging and Diverging Governance Mechanisms: The Role of (Dys)Function in Long‐term Inter‐organizational Relationships

“…For instance, future studies should explore the impact of foreign ownership on governance and performance and the impact of differences in formal/regulatory institutions (e.g. Cumming et al, 2017). Moreover, future studies may also explore how external agents such as governments, non-governmental organizations and regulatory institutions influence the interplay of governance mechanisms, and whether certain functions or dysfunctions are emphasized by the wider stakeholder network.…”