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Corporate Governance Structures, Legal Origin and Firm Performance

Author

Listed:
  • Andersson, David E

    (Tainan University)

  • Andersson, Martin

    (JIBS & CESIS)

  • Bjuggren, Per-Olof

    (Ratio, JIBS, CESIS)

  • Högberg, Andreas

    (JIBS)

Abstract

There is by now a vast literature on how institutional environments affect corporate investments. Much of this literature centres on corporate governance structures and the broader legal environment in which firms operate. This paper conducts a comparative analysis of three countries with on the surface similar ownership structures but different legal origin. The three countries in the study are Sweden, Taiwan and Hong Kong. These countries are known for strong family ownership but have different legal origins; Scandinavian, German and English, respectively. The paper describes the corporate governance structures in each respective country. Also, since Chinese informal institutions are typically strong and can potentially exert an influence on the actions of managers, these are explained. The comparative analysis is based on an assessment of the countries’ investment performance by means of a marginal q approach. Differences in their performance are interpreted in view of the legal origin hypothesis. Furthermore, investments are decomposed such that returns on different sources of funds can be estimated.

Suggested Citation

  • Andersson, David E & Andersson, Martin & Bjuggren, Per-Olof & Högberg, Andreas, 2014. "Corporate Governance Structures, Legal Origin and Firm Performance," Ratio Working Papers 246, The Ratio Institute.
    • Handle: RePEc:hhs:ratioi:0246
    as

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    References listed on IDEAS

    as
    1. Enright, Michael J. & Scott, Edith E. & Dodwell, David, 1997. "The Hong Kong Advantage," OUP Catalogue, Oxford University Press, number 9780195903225.
    2. Klaus Gugler, 2003. "Corporate governance and investment," International Journal of the Economics of Business, Taylor & Francis Journals, vol. 10(3), pages 261-289.
    3. La Porta, Rafael & Florencio Lopez-de-Silanes & Andrei Shleifer & Robert W. Vishny, 1997. "Legal Determinants of External Finance," Journal of Finance, American Finance Association, vol. 52(3), pages 1131-1150, July.
    4. Rafael La Porta & Florencio Lopez‐De‐Silanes & Andrei Shleifer & Robert Vishny, 2002. "Investor Protection and Corporate Valuation," Journal of Finance, American Finance Association, vol. 57(3), pages 1147-1170, June.
    5. Rafael La Porta & Florencio Lopez‐De‐Silanes & Andrei Shleifer, 1999. "Corporate Ownership Around the World," Journal of Finance, American Finance Association, vol. 54(2), pages 471-517, April.
    6. Gugler, Klaus & Mueller, Dennis C & Yurtoglu, B Burcin, 2004. "Corporate Governance and the Returns on Investment," Journal of Law and Economics, University of Chicago Press, vol. 47(2), pages 589-633, October.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Corporate governance; institutional environment; legal origin; marginal q;
    All these keywords.

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance

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