Property Rights Protection, Corporate Transparency, and Growth

Journal of International Business Studies, Forthcoming

Posted: 8 Jul 2009

See all articles by Art Durnev

Art Durnev

University of Iowa - Henry B. Tippie College of Business

Vihang R. Errunza

McGill University - Desautels Faculty of Management

Alexander Molchanov

Massey University

Multiple version iconThere are 3 versions of this paper

Date Written: July 3, 2009

Abstract

In countries with secure property rights, corporate transparency improves investment efficiency and increases growth by alleviating information asymmetry. However, in countries with insecure property rights, greater transparency can increase the risk of government expropriation. Therefore, some firms that would benefit most from transparency cannot take full advantage of it, as they set sub-optimal transparency levels. Using data from 59 industries in 69 countries, we find that in countries with weak property rights protection, industries that would benefit the most from transparency exhibit worse investment efficiency and grow slower compared to industries that can efficiently operate at minimal levels of transparency.

Suggested Citation

Durnev, Artyom and Errunza, Vihang R. and Molchanov, Alexander, Property Rights Protection, Corporate Transparency, and Growth (July 3, 2009). Journal of International Business Studies, Forthcoming, Available at SSRN: https://ssrn.com/abstract=1429361

Artyom Durnev (Contact Author)

University of Iowa - Henry B. Tippie College of Business ( email )

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Vihang R. Errunza

McGill University - Desautels Faculty of Management ( email )

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Alexander Molchanov

Massey University ( email )

Auckland
New Zealand

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