IDEAS home Printed from https://ideas.repec.org/a/eee/riibaf/v67y2024ipbs0275531923002143.html
   My bibliography  Save this article

Public governance and the demand for corporate governance: The role of political institutions

Author

Listed:
  • Kuo, Nan-Ting
  • Lee, Cheng-Few

Abstract

Our study explores the association between political institutions and the demand for corporate governance. Stulz (2005) suggests that government expropriation reduces the value of corporate governance realized by investors. Accordingly, we argue that strong political institutions induce higher demand for corporate governance because they constrain government expropriation. Exploring an international sample, we find that firms in countries with stronger political institutions implement more governance provisions. Mediation analysis demonstrates that political institutions work through the channel of constraining government expropriation. Moreover, government expropriation makes shareholder direct control over firms more prevalent, where political institutions influence the allocation of control rights between managers and investors, which affects the demand for corporate governance. We contribute to the corporate governance literature and the agency problem literature.

Suggested Citation

  • Kuo, Nan-Ting & Lee, Cheng-Few, 2024. "Public governance and the demand for corporate governance: The role of political institutions," Research in International Business and Finance, Elsevier, vol. 67(PB).
    • Handle: RePEc:eee:riibaf:v:67:y:2024:i:pb:s0275531923002143
    DOI: 10.1016/j.ribaf.2023.102088
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0275531923002143
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.ribaf.2023.102088?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:riibaf:v:67:y:2024:i:pb:s0275531923002143. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/ribaf .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.