Corporate Governance and Regulation: Can There Be Too Much of a Good Thing?

By Valentina Bruno, Stijn Claessens. 2007

294 citations recorded by the source corpus.

For a large number of companies from different countries, the authors analyze how company corporate governance practices and country regulatory regimes interact in terms of company valuation. They confirm that corporate governance plays a crucial role in efficient company monitoring and shareholder protection, and consequently positively impacts valuation. They find substitution in valuation impact between corporate governance measures at the company and country level, with a possibility of over-regulation. Corporate governance appears more valuable for companies that rely heavily on external financing, consistent with the hypothesis that the main role of corporate governance is to protect external financiers.

Subfields: Accounting, Strategy and Management

View Paper: https://www.semanticscholar.org/paper/da237a435140a91acbfee9acb564c49308dadecf

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Citations in the corpus

What Matters and for Which Firms for Corporate Governance in Emerging Markets? Evidence from Brazil (and Other BRIK Countries) (2012, background): “Within a given country, optimal governance may depend on firm characteristics (e.g., Arcot and Bruno, 2006; Bruno and Claessens, 2007; Mulherin, 2005; Demsetz and Lehn, 1985).”
Government ownership and corporate governance: Evidence from the EU. (2012, unknown): “…of multiple corporate governance measures, we also examine specific subcomponents that have received significant attention in the literature (e.g., Bruno and Claessens, 2010): board independence, the presence of board committees, board entrenchment, committee independence, board transparency, and…”
Does “Good” Corporate Governance Help in a Crisis? The Impact of Country‐ and Firm‐Level Governance Mechanisms in the European Financial Crisis (2013, methodology): “For example, Bruno and Claessens (2010) find that the presence and independence of four functional committees (audit, nomination, compensation, and governance) have a positive impact on firm value. Notwithstanding the value of vigilant board oversight, the managerial discretion literature suggests t”
Property rights protection, corporate transparency, and growth (2009, unknown): “Bruno and Claessens (2007) and Durnev and Kim (2005) discuss how firm governance can serve as a substitute for governance regulations. Another research stream (Warner, Watts, and Wruck (1998), DeAngelo (1988) among others) examines how managers use corporate disclosure to reduce the likelihood of un”
Corporate Governance and Firm Value: International Evidence (2011, unknown): “equivocally clear that better governance is in fact related to higher company valuations as the costs associated with the implementation of stronger governance mechanisms may outweigh the benefits (e.g., Gillan et al., 2003; Chhaochharia and Grinstein, 2007; Bruno and Claessens, 2010).”
Do Country Level Investor Protections Impact Security Level Contract Design? Evidence from Foreign Bond Covenants (2012, unknown): “Klapper and Love 2004, Durnev and Kim 2005, Bruno and Claessens 2007) and private firm charters (Bergman and Nicolaievsky 2007), to adapt to weak institutions. Doidge Karolyi and Stulz (2007) show that firm level factors do not explain governance scores in weak investor protection countries, suggest”
Behind the Scenes: The Corporate Governance Preferences of Institutional Investors (2015, result): “Our evidence is also consistent with the Bruno and Claessens (2007) evidence that the two most important governance mechanisms across countries are independence of the board and independence of the board committees.”
Differences in Governance Practices between U.S. and Foreign Firms: Measurement, Causes, and Consequences (2009, background): “Bruno and Claessens (2007) find that companies with strong corporate governance rely heavily on external finance.”
Corporate Governance and Investors' Perceptions of Foreign IPO Value: An Institutional Perspective (2014, methodology): “Governance researchers are increasingly recognizing that firmlevel governance should be analyzed in conjunction with institutional factors, such as laws and regulations (Aguilera et al., 2008; Bruno & Claessens, 2007).”