Determinants of Corporate Governance Codes
London School of Economics and Political Science
November 8, 2014
LSE Legal Studies Working Paper No. 5/2014
This article analyzes how corporate governance committees develop best practice rules in a changing political, economic and legal environment and how new techniques in regulating corporate governance are disseminated in Europe. I find that regulatory reform is positively associated with changes to international benchmark models of good governance, negatively associated with concentrated ownership structure and the civil-law legal tradition, and not associated with the preponderance of issuer or investor representatives on the drafting committee. Furthermore, the probability of adopting a particular corporate governance rule is positively related to the number of countries having adopted a similar rule. In spite of such cross-border legal learning, convergence of corporate governance regimes, defined formally as the lower variance of legal variables over time, has not yet occurred in Europe.
The Appendices for this paper are available at the following URL: http://ssrn.com/abstract=2521100
Number of Pages in PDF File: 74
Keywords: Corporate governance codes, board structure, empirical legal research, interest group politics, convergence
JEL Classification: G34, G38, K22, P51
Date posted: February 13, 2014 ; Last revised: August 21, 2015
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