Corporate Governance and Regulation: Can There Be Too Much of a Good Thing?

50 Pages Posted: 20 Apr 2016

See all articles by Valentina Bruno

Valentina Bruno

American University - Department of Finance and Real Estate

Stijn Claessens

Bank for International Settlements (BIS)

Multiple version iconThere are 3 versions of this paper

Date Written: March 1, 2007

Abstract

For a large number of companies from different countries, the authors analyze how company corporate governance practices and country regulatory regimes interact in terms of company valuation. They confirm that corporate governance plays a crucial role in efficient company monitoring and shareholder protection, and consequently positively impacts valuation. They find substitution in valuation impact between corporate governance measures at the company and country level, with a possibility of over-regulation. Corporate governance appears more valuable for companies that rely heavily on external financing, consistent with the hypothesis that the main role of corporate governance is to protect external financiers.

Keywords: National Governance, Governance Indicators, Corporate Law, Microfinance, Small Scale Enterprise

Suggested Citation

Bruno, Valentina Giulia and Claessens, Stijn, Corporate Governance and Regulation: Can There Be Too Much of a Good Thing? (March 1, 2007). World Bank Policy Research Working Paper No. 4140. Available at SSRN: https://ssrn.com/abstract=964802

Valentina Giulia Bruno

American University - Department of Finance and Real Estate ( email )

Kogod School of Business
4400 Massachusetts Ave., N.W.
Washington, DC 20016-8044
United States

HOME PAGE: http://www.american.edu/kogod/faculty/bruno.cfm

Stijn Claessens (Contact Author)

Bank for International Settlements (BIS) ( email )

Centralbahnplatz 2
CH-4002 Basel
Switzerland

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