Governance Codes: Facts Or Fictions? A Study Of Governance Codes In Colombia
AbstractThis article studies the effects on accounting performance and financing decisions of Colombian firms after issuing a corporate governance code. We assemble a database of Colombian issuers and test the hypotheses of improved performance and higher leverage after issuing a code. The results show that the firms´ return on assets after the code introduction improves in excess of 1%; the effect is amplified by the code quality. Additionally, the firms leverage increased, in excess of 5%, when the code quality was factored into the analysis. These results suggest that controlling parties commitment to self restrain, by reducing their private benefits and/or the expropriation of non controlling parties, through the code introduction, is indeed an effective measure and that the financial markets agree, increasing the supply of funds to the firms.
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Bibliographic InfoArticle provided by UNIVERSIDAD ICESI in its journal ESTUDIOS GERENCIALES.
Volume (Year): (2010)
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Corporate governance; governance codes; agency theory; accounting performance; leverage.;
Find related papers by JEL classification:
- G30 - Financial Economics - - Corporate Finance and Governance - - - General
- M48 - Business Administration and Business Economics; Marketing; Accounting - - Accounting - - - Government Policy and Regulation
- K22 - Law and Economics - - Regulation and Business Law - - - Business and Securities Law
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- Marek Gruszczynski, 2005.
"Corporate governance and financial performance of companies in Poland,"
19, Department of Applied Econometrics, Warsaw School of Economics.
- Marek Gruszczynski, 2006. "Corporate Governance and Financial Performance of Companies in Poland," International Advances in Economic Research, Springer, vol. 12(2), pages 251-259, May.
- Andrés Langebaek & Jaime Eduardo Ortíz, 2007. "Q De Tobin Y Gobierno Corporativo De Las Empresas Listadas En Bolsa," BORRADORES DE ECONOMIA 003960, BANCO DE LA REPÚBLICA.
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