Corporate governance and institutions—A review and research agenda

Research Question/Issue Over the last decades, research on the relationship between national institutions, governance mechanisms, and firm outcomes has been increasing. This review aims at (i) analyzing extant research in this area, (ii) identifying influential current trends, and (iii) highlighting future avenues of research. Research Findings/Insights Using a content analysis of 165 articles published in top journals from accounting, finance, management, and organization disciplines, we explore research on institutions, corporate governance, and firm outcomes. Our results show that stronger national institutions aimed at protecting investors are mostly associated with better corporate governance and firm financial outcomes and that these relationships are moderated by some contingency factors. Theoretical/Academic Implications Our findings encourage scholars to further explore the relationship between national institutions, corporate governance, and firm outcomes by using theoretical frameworks and methods allowing them (i) to develop a “thicker” understanding of the national institutional context, (ii) to analyze powerful stakeholders' influence on the above relationships, and (iii) to better understand the role played by informal institutions. Practitioner/Policy Implications Our findings help policymakers and investors to (i) better understand how national institutions impact on both governance mechanisms and firm outcomes and (ii) develop policies or design governance mechanisms taking into consideration country‐, industry‐, and firm‐level contingencies.