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Determinants of corporate governance codes

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  • Gerner-Beuerle, Carsten

Abstract

Corporate governance codes are an increasingly prominent feature of the regulatory landscape in many countries, yet remarkably little is known about the determinants of corporate governance reform. Potential determinants include: (1) the diffusion of an international benchmark model of good governance; (2) a country’s legal system; (3) the desire to attract foreign investors; and (4) the influence of interest groups. I construct a proxy for the investor-friendliness of 52 corporate governance codes of different jurisdictions and collect data on the code issuers. I find strong evidence that the drafters of codes emulate international benchmark models and that jurisdictions belonging to different legal traditions use different regulatory strategies, some evidence that portfolio equity inflows are associated with the investor-friendliness of codes, and no evidence that interest groups succeed in affecting rules. The article suggests a method for the modeling of legal evolution, convergence, and the political economy of corporate governance codes.

Suggested Citation

  • Gerner-Beuerle, Carsten, 2014. "Determinants of corporate governance codes," LSE Research Online Documents on Economics 55828, London School of Economics and Political Science, LSE Library.
    • Handle: RePEc:ehl:lserod:55828
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    References listed on IDEAS

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    Cited by:

    1. Ibrahim Khalifa Elmghaamez, 2021. "Reasons behind the worldwide diversity in identity and issuance of good governance codes," International Journal of Disclosure and Governance, Palgrave Macmillan, vol. 18(2), pages 136-152, June.

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    More about this item

    Keywords

    Corporate governance codes; board structure; empirical legal research; interest group politics; convergence.;
    All these keywords.

    JEL classification:

    • L81 - Industrial Organization - - Industry Studies: Services - - - Retail and Wholesale Trade; e-Commerce

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