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 presents three models analyzing the determinants of corporate governance reform, the international diffusion of legal innovations in corporate governance, and the convergence of corporate governance systems. The results show that regulatory reform is positively associated with changes to international benchmark models of good governance, negatively associated with concentrated ownership structure and civil-law legal traditions, and not associated with the preponderance of issuer or investor representatives on the drafting committees. We also find that 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, understood 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: 65
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: January 6, 2015
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