What Drives Corporate Governance Reform? Firm-Level Evidence from Eastern Europe

28 Pages Posted: 27 Jun 2005

See all articles by Leora F. Klapper

Leora F. Klapper

World Bank; World Bank - Development Research Group (DECRG)

Luc Laeven

European Central Bank (ECB); Centre for Economic Policy Research (CEPR)

Inessa Love

World Bank - Development Economics Data Group (DECDG)

Date Written: May 2005

Abstract

We study differences in the use of two corporate governance provisions - cumulative voting and proxy by mail voting - in a sample of 224 firms located in four Eastern European countries. We find a significant relationship between ownership structure and the use of corporate governance provisions. Firms with a controlling owner (owning more than 50% of shares) are less likely to adopt either of the two provisions.

However, firms that have large, minority shareholders are more likely to adopt these provisions. We do not find any significant relationship between the use of these provisions and foreign ownership. Our results suggest that the decision to adopt these corporate governance provisions is influenced by large, minority shareholders in their battle for representation on the board and in managerial decisions.

JEL Classification: G34, P2

Suggested Citation

Klapper, Leora F. and Laeven, Luc A. and Love, Inessa, What Drives Corporate Governance Reform? Firm-Level Evidence from Eastern Europe (May 2005). Available at SSRN: https://ssrn.com/abstract=749424

Leora F. Klapper (Contact Author)

World Bank ( email )

1818 H Street, N.W.
Washington, DC 20433
United States
202-473-8738 (Phone)

HOME PAGE: http://econ.worldbank.org/staff/lklapper

World Bank - Development Research Group (DECRG)

1818 H. Street, N.W.
MSN3-311
Washington, DC 20433
United States

Luc A. Laeven

European Central Bank (ECB) ( email )

Sonnemannstrasse 22
Frankfurt am Main, 60314
Germany

Centre for Economic Policy Research (CEPR)

London
United Kingdom

Inessa Love

World Bank - Development Economics Data Group (DECDG) ( email )

1818 H Street, N.W.
Washington, DC 20433
United States

HOME PAGE: http://econ.worldbank.org/staff/ilove

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