Does Compliance with the German Corporate Governance Code Have an Impact on Stock Valuation? An empirical analysis
Abstract
Since 2002 company law requires listed German corporations to declare their degree of conformity to the German Corporate Governance Code (GCGC). We examine whether there is a pricing effect connected to the declared degree of compliance for a sample of (big) publicly traded German companies listed in the DAX 30 and MDAX. We find that the degree of compliance with the Code is value-relevant after controlling for an endogeneity bias. This shows that the capital markets find the rules in the code meaningful and that there is capital market pressure to adopt the Code regulation. Our findings also suggest that the capital market fills a possible "control vacuum" resulting from the withdrawal of commercial banks from their (former) influential role in the German "insider control" corporate governance model. Copyright (c) 2006 The Authors; Journal compilation (c) 2006 Blackwell Publishing Ltd.Download Info
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Article provided by Wiley Blackwell in its journal Corporate Governance: An International Review.
Volume (Year): 14 (2006)
Issue (Month): 5 (09)
Pages: 432-445
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Web page: http://www.blackwellpublishing.com/journal.asp?ref=0964-8410&site=1
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- George Iatridis, Panayotis Alexakis, 2012. "Evidence of voluntary accounting disclosures in the Athens Stock Market Purpose – The purpose of this paper is to explore the motives for providing voluntary accounting disclosures and investigate t," Review of Accounting and Finance, Emerald Group Publishing, vol. 1(1), pages 73-92, February.
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