Governance and Performance Revisited

ECGI - Finance Working Paper No. 28/2003

EFA 2003 Annual Conference Paper No. 252

32 Pages Posted: 18 Jul 2003 Last revised: 22 Jan 2019

See all articles by Øyvind Bøhren

Øyvind Bøhren

BI Norwegian Business School; European Corporate Governance Institute (ECGI)

Bernt Arne Ødegaard

University of Stavanger

Multiple version iconThere are 2 versions of this paper

Date Written: February 1, 2004


Using unusually rich and accurate data from Oslo Stock Exchange firms, we find that corporate governance matters for economic performance, that insider ownership matters the most, that outside ownership concentration destroys market value, that direct ownership is superior to indirect, and that performance decreases with increasing board size, leverage, dividend payout, and the fraction of non-voting shares. These results persist across a wide range of single-equation models, suggesting that governance mechanisms are independent and may be analyzed one by one rather than as a bundle. Several significant relationships change sign or disappear in simultaneous equation models. This apparent indication of optimal, firm specific governance systems may instead reflect weak instruments caused by underdeveloped theories of how governance and performance interact.

Keywords: Corporate Governance, Economic Performance, Simultaneous Equations, Norway

JEL Classification: G3, L22

Suggested Citation

Bøhren, Øyvind and Ødegaard, Bernt Arne, Governance and Performance Revisited (February 1, 2004). ECGI - Finance Working Paper No. 28/2003, EFA 2003 Annual Conference Paper No. 252, Available at SSRN: or

Øyvind Bøhren

BI Norwegian Business School ( email )

Nydalsveien 37
Oslo, 0442
46410503 (Phone)

European Corporate Governance Institute (ECGI) ( email )

c/o the Royal Academies of Belgium
Rue Ducale 1 Hertogsstraat
1000 Brussels

Bernt Arne Ødegaard (Contact Author)

University of Stavanger ( email )

UiS Business School
Stavanger, NO-4036


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