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A cross-country comparison of corporate governance and firm performance: Do financial structure and the legal system matter?

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  • Anderson, Anne
  • Gupta, Parveen P.

Abstract

We blend the corporate governance and the financial structure/legal system literature streams to study whether firm performance is enhanced when its governance structure embodies the demands of the host country’s financial structure and legal system. Using a sample of 1736 unique firms representing 22 countries, we find that the joint effect of a country’s financial structure and legal system does matter when explaining the relationship between performance and the overall level of corporate governance in a given country. The results also suggest that firms operating in the market/common combination countries tend to command higher market valuations than firms with a comparable level of corporate governance that operate in the bank/civil combination countries.

Suggested Citation

  • Anderson, Anne & Gupta, Parveen P., 2009. "A cross-country comparison of corporate governance and firm performance: Do financial structure and the legal system matter?," Journal of Contemporary Accounting and Economics, Elsevier, vol. 5(2), pages 61-79.
    • Handle: RePEc:eee:jocaae:v:5:y:2009:i:2:p:61-79
    DOI: 10.1016/j.jcae.2009.06.002
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