One Size Does Not Fit All, After All: Evidence from Corporate Governance
ESSEC Business School - Finance Department
American University - Department of Finance and Real Estate
January 15, 2007
1st Annual Conference on Empirical Legal Studies, Forthcoming
We identify well-governed companies by accounting for heterogeneity in their governance choices by using a unique dataset. We find that companies that depart from governance best practice because of genuine circumstances outperform all others and cannot be considered badly-governed. On the contrary, we find that mechanical adherence to best practice does not always lead to superior performance. We thus argue that flexibility in corporate governance regulation plays a crucial role, because companies are not homogenous entities.
Number of Pages in PDF File: 49
Keywords: Corporate Governance, Empirical Finance, Code of Best Practice, Flexible Regulation, UK
JEL Classification: G34, G38, K29working papers series
Date posted: March 3, 2006
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