Product market competition and corporate governance

Abstract

2016-03-21T19:08:36

Corporate governance, external market discipline and firm productivity

“…governance -measured either by board independence or CEO stock-based compensation -is more useful and has a positive influence on TFP. These findings are consistent with US studies using financial performance measures, such as Hart (1983), Chou et al (2008), and Giroud and Mueller (2009a). In contrast to US evidence regarding the effectiveness of market for corporate control, we document that in Australia takeover threat does not influence firm productivity either directly or indirectly via the link between internal corporate governance and productivity.…”

“…Aggarwal and Samwick (1999) find that more competitive industries are characterized by weaker pay-for-performance incentives. Chou et al (2008) document that firms with weaker governance structures tend to be in competitive industries or they have low market power. Further, governance has a significant impact on firm's stock market returns only when product market competition is weak.…”

Corporate control and credible commitment

“…Other studies report similar results with respect to corporate governance generally. See, e.g., Chou et al (2011) (corporate governance has a significant effect on firm value only when product market competition is weak); Claessens and Yurtoglu (2013) (corporate governance problems are less severe when competition is already high in factor markets). Because we are concerned here with how controllers can credibly commit to the capital structure they bring to market, we do not pursue this issue here.…”

Competição no mercado de produtos, governança corporativa e desempenho das companhias

“…Como exemplo, diversas pesquisas analíticas e empíricas vêm sendo desenvolvidas recentemente sobre o tema (ALLEN;GALE, 1999;GROSFELD;TRESSEL, 2001;JANUSZEWSKI et al, 2001;RANDOY;JENSSEN, 2004;PERÉZ-GONZÁLES, 2006;KARUNA, 2007KARUNA, , 2008CHOU et al, 2008;MUELLER, 2008MUELLER, , 2009 Somada a estas evidências, tem-se a ausência de estudos específicos sobre o assunto no…”

“…Chou et al (2008) As principais conclusões do estudo vão ao encontro das predições de Allen e Gale (1999), pois competição apresentou-se nos resultados como uma variável substituta da governança corporativa. Firmas em mercados com alta competição tendem a ter "fraca" governança corporativa.…”