scholarly journals Dividends and institutional investors activism: Pressure resistant or pressure sensitive?

2008 ◽  
Vol 6 (1) ◽  
pp. 38-43 ◽  
Author(s):  
José María Diez-Esteban ◽  
Óscar López-de-Foronda
Keyword(s):  
Corporate Governance ◽  
Legal System ◽  
Institutional Investors ◽  
Dividend Policy ◽  
Civil Law ◽  
Insurance Companies ◽  
Agency Conflicts ◽  
Anglo Saxon ◽  
Investment Funds ◽  
Different Characteristics

This paper provides new international evidence on the relationship between dividend policy and institutional ownership by analysing a sample of US and UK and Irish firms characterised by an Anglo-Saxon tradition and a matching sample of other EU companies from Civil Law legal systems. We hypothesize that, due to the different characteristics of both the legal system and the nature of agency conflicts in firms from those countries, the type of institutional investors and their role in corporate governance is different and so the use of dividend policy to solve the conflict of corporate governance problem differs in each legal system. We find that while in firms from Anglo-Saxon tradition the relation between dividends and institutional investors, pension and investment funds, is possitive, in Civil Law countries the relation is negative where investors are banks or insurance companies with other private interest inside the firm. These results are consistent with our hypotheses and breed new insights into the role of dividend policy as a disciplining mechanism in firms from different legal system with an important presence of institutional investors

Corporate governance, accounting transparency and stock exchange sizes in Germany, Japan and «Anglo-Saxon» economies, 1870–1950

2019 ◽  
Vol 64 (2) ◽  
pp. 157-186
Author(s):  
Leslie Hannah
Keyword(s):  
New York ◽  
Corporate Governance ◽  
Stock Exchange ◽  
Civil Law ◽  
Corporate Bond ◽  
Stock Exchanges ◽  
Anglo Saxon ◽  
Legal Rules ◽  
Legal Origins ◽  
The Us

AbstractModern discussions of corporate governance have focused on convergence of «varieties of capitalism», particularly the recent «Americanisation» of laws and voluntary codes in Germany, Japan, and other civil law countries. However German and Japanese legal and business historians have suggested that corporate governance, accounting transparency or other favourable factors in their countries were historically a match for – or even superior to – those in the US. An alleged consequence was deeper penetration by the Berlin and Tokyo stock exchanges of their domestic economies than of the US by the New York Stock Exchange (NYSE), using measures such as market capitalization/GDP ratios. This paper reviews the classic Rajan and Zingales data on the sizes of stock exchanges. It concludes that the evidence for Japanese historical precocity relative to the US, after the necessary allowance is made for regional stock exchanges and corporate bond finance, stands up better to this closer examination than that for Germany.Many financial historians now agree that stock exchange development was not historically determined by legal origins («Anglo-Saxon» common vs Euro-Japanese civil law), though today it appears to be driven by legal rules protecting shareholders and/or bondholders and limiting directorial autocracy and information asymmetry. However, both today and historically in some cultures private order rules (voluntary codes, bourse listing requirements, bankers as trusted intermediaries, block-holder monitoring, etc) offered substitute protections, or at least complemented protective laws. This paper reviews the plausibility of these determinants of historical stock exchange sizes – and others that have been neglected – in Japan, Germany, and elsewhere, before 1950.

scholarly journals Effect of the legal system country of European commercial banks on the financial distress

2016 ◽  
Vol 4 (2) ◽  
pp. 168
Author(s):  
Nizar Baklouti ◽  
Frédéric Gautier ◽  
François Aubert
Keyword(s):  
European Union ◽  
Corporate Governance ◽  
Legal System ◽  
Financial Distress ◽  
Commercial Banks ◽  
Common Law ◽  
Civil Law ◽  
The European Union ◽  
Financial Health ◽  
The Relationship

This study examines the effect of the legal system on the governance of banks and hence on financial distress. We compare corporate governance to the legal system in 18 countries of the European Union to explain the relationship between financial distress and bank governance. Using a sample of 147 commercial banks, we find that the effect of the legal system really counts. The results also suggest that banks operating in common law and civil law countries tend the concentration of ownership and board size to the effect of increasing the likelihood of financial distress. This study contributes to research in the governance of enterprise to provide empirical evidence that the legal system has the power to influence the financial health of banks.

scholarly journals A tale of lost chances. A short history of corporate governance and ownership in Italy

2009 ◽  
Vol 7 (1) ◽  
pp. 265-273 ◽  
Author(s):  
Andrea Colli
Keyword(s):  
Corporate Governance ◽  
Institutional Investors ◽  
Institutional Transformation ◽  
Anglo Saxon ◽  
Short History ◽  
Minority Shareholders ◽  
Historical Approach ◽  
Slow Pace ◽  
History Of ◽  
And Control

When the process of institutional transformation reached its peak at the end of the Nineties, many commentators (and politicians) said the Italian system of governance, ownership and control of large firms was on the verge of a (hopefully) quick process of convergence towards the Anglo-Saxon standards of transparency, protection of minority shareholders, diffused presence of institutional investors able to exert a monitoring role over the management and an increase in the efficiency of the whole system. Apart from these expectations, this process has been occuring at a very slow pace – and according to other observers, has not taken place at all. This article through a dynamic, historical approach reconstructs the process of evolution and change in the institutional framework, and explores the reasons of this limited convergence.

scholarly journals Perspectives and obstacles of the shareholder activism implementation: A comparative analysis of civil and common law systems

2015 ◽  
Vol 13 (1) ◽  
pp. 520-533 ◽  
Author(s):  
Khurram Parvez Raja ◽  
Alex Kostyuk
Keyword(s):  
Corporate Governance ◽  
Comparative Analysis ◽  
Stock Market ◽  
Legal System ◽  
Common Law ◽  
Civil Law ◽  
Shareholder Activism ◽  
Legal Systems ◽  
The Usa ◽  
The Uk

The paper outlines shareholder activism development in common law and civil law countries and identifies features of these legal systems that create preconditions and obstacles for shareholder activism. Our findings show that tendencies of shareholder activism depend on the type of the legal system, but also vary within the countries that share the same legal system. Thus, we conclude that the type of legal system is not the chief determinant of shareholder activism. A comparative analysis of shareholder activism in Germany and Ukraine (civil law countries) and the USA and the UK (common law countries) shows that the system of domestic corporate regulation, development of the stock market, companies’ capitalization and corporate governance influence the development of shareholder activism in equal measure.

Legal protection systems, corporate governance and firm performance: a cross-country comparison

2022 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Yosra Ghabri
Keyword(s):  
Corporate Governance ◽  
Firm Performance ◽  
Legal System ◽  
Institutional Environment ◽  
Common Law ◽  
Investor Protection ◽  
Civil Law ◽  
Legal Protection ◽  
Content Type ◽  
Valuation Effect

Purpose This paper builds on the “Law and Finance” theory and aims to examine the effect of the legal and institutional environment on the governance–performance relationship in the context of non-US firms. More precisely, it examines whether and how the country’s legal system and the level of investor protection interact with the firm-level corporate governance and affect firm performance. Design/methodology/approach The authors used the “G-Index” governance score developed by the Governance Metrics International rating for a sample of 12,728 firm-year observations from 23 countries over the 2009–2016 period. Findings The results show that the interaction between the country-level institutions and corporate governance system significantly affect the firm performance. In particular, the findings indicate that firms operating in common law countries tend to exhibit a positive valuation effect and higher performance than firms with a comparable corporate governance level operating in civil law countries. More precisely, the authors find that in common law countries, higher investor protection with enhanced corporate governance is associated with better firm performance. However, firms operating in civil law countries with weaker investor protection and a comparable corporate governance level tend to experience a negative valuation effect. Originality/value The findings suggest that the institutional and legal environment is crucial and important in determining the value-maximizing level of good governance practices. Managers and regulators should carefully analyze the cost of these initiatives and should coordinate it with the needs of the country’s legal system. The challenge for the company will be how to adjust its corporate governance strategy according to the needs and demands of the country’s legal system in which the company operates to improve its performance. The regulators should ensure a fit between the specifics of the national legal and institutional environment and corporate governance standards and practices.

scholarly journals Shareholders rights and remedies (comparative law perspective)

2016 ◽  
Vol 12 (3) ◽  
pp. 6-13 ◽  
Author(s):  
Yuliya Lapina ◽  
Alexander Kostyuk ◽  
Udo Braendle ◽  
Yaroslav Mozghovyi
Keyword(s):  
Corporate Governance ◽  
Stock Market ◽  
Legal System ◽  
Civil Law ◽  
Comparative Law ◽  
Equal Treatment ◽  
Rights Protection ◽  
Shareholder Protection ◽  
Efficient Mechanisms

The main aim is to discuss shareholder rights protection in Ukraine and Germany, which have the same Civil law legal system. Our contribution outlines, systemizes and accesses approaches how critical and weak issues in the area of shareholder protection are resolved in both countries using the mechanisms of corporate governance. Using Germany as a benchmark, the paper identifies that the most important and efficient mechanisms of shareholders rights protection, which can be implemented in Ukrainian companies are the following: principle of equal treatment and duty of loyalty which should be fixed in the legislation; enhancing the role of the National Securities and Stock Market Commission; introduction of the derivative suit system.

scholarly journals Lender representatives on board of directors and internationalization in firms: an institutionalized agency perspective

2021 ◽  
Author(s):  
Vidya Sukumara Panicker ◽  
Rajesh Srinivas Upadhyayula ◽  
Sumit Mitra
Keyword(s):  
Corporate Governance ◽  
Board Of Directors ◽  
Institutional Investors ◽  
Institutional Environment ◽  
Anglo Saxon ◽  
Strategic Decisions ◽  
Time Period ◽  
The Board Of Directors ◽  
Domestic Banks ◽  
The Impact

AbstractFrom an agency perspective, the Anglo-Saxon features of corporate governance are predominantly explored by various studies in extant literature. However, it has recently been established that diverse and unique institutional configurations exist in different economies across the world and hence, the attitude of different actors within a firm, as shaped by institutional logics, can vary. Our study applies the institutionalized agency perspective to understand how the behaviour of different actors, within firms in the Indian institutional context, are shaped, consequently determining their roles in the strategic decisions of firms. We examine the representation of lenders in the board of directors, which is a characteristic of corporate governance in India. Our sample for this study consists of 985 unique Indian firms and 5513 firm year observations across the 2006–2017 time-period. We find a negative association between the proportion of lender representatives on board of directors and internationalization of firms. In addition, we also find that family ownership positively moderates this relation, whereas foreign institutional investors and domestic banks and financial institutional investors moderate this relationship negatively. In this manner, we explore the impact of institutional environment on a very specific actor (lenders) and their representatives towards internationalization.

scholarly journals Effect of the legal system country of European commercial banks on the financial distress

2017 ◽  
Vol 5 (1) ◽  
pp. 40
Author(s):  
Nizar Baklouti ◽  
Frédéric Gautier ◽  
François Aubert
Keyword(s):  
European Union ◽  
Corporate Governance ◽  
Legal System ◽  
Financial Distress ◽  
Commercial Banks ◽  
Common Law ◽  
Civil Law ◽  
The European Union ◽  
Financial Health ◽  
The Relationship

This study examines the effect of the legal system on the governance of banks and hence on financial distress. We compare corporate governance to the legal system in 18 countries of the European Union to explain the relationship between financial distress and bank governance. Using a sample of 147 commercial banks, we find that the effect of the legal system really counts. The results also suggest that banks operating in common law and civil law countries tend the concentration of ownership and board size to the effect of increasing the likelihood of financial distress. This study contributes to research in the governance of enterprise to provide empirical evidence that the legal system has the power to influence the financial health of banks.

scholarly journals Stock Allocation in Turkish Capital Markets: Industry and Firm Level Perspectives

2017 ◽  
Vol 9 (1) ◽  
pp. 100
Author(s):  
Ozlem KUTLU FURTUNA
Keyword(s):  
Corporate Governance ◽  
Capital Markets ◽  
Institutional Investors ◽  
Firm Level ◽  
Investment Funds ◽  
Trading Patterns ◽  
Detailed Classification ◽  
Governance Practices ◽  
Stock Allocation ◽  
Stock Investments

Investors’ trading patterns has been an intensively researched topic in emerging markets depending on their significant role and power in the capital markets. This paper provides what global and domestic factors have driven the stock allocation of investors in Turkey and how has the crisis changed investors’ attitude toward stock allocation between the years 2006 and 2016. Year-end stock allocation data are obtained from the Central Securities Depository Institution of Turkey. Stock allocation has been investigated mainly in terms of the domestic and foreign stock investments. A detailed classification of investors as individual and institutional investors in terms of investment funds, corporate and investment trusts with firm and industry levels has also been evaluated. The variations on stock allocation has been examined in BIST Industrials, Financials and Services Industries. Additionally, this paper gives an insight about the firm and industry level stock allocation in Turkish Capital Markets considering the responsible stockholders. Corporate governance practices are considered to be strengthened with the growing role of institutional investors in the financial system, which provide insights about the investor profile of BIST Corporate Governance Index in the related period.

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