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Controlling shareholder entrenchment, corporate governance and corporate performance

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  • Jackie Di Vito
  • Yves Bozec

Abstract

The objective of this study is to explore the link between controlling shareholder entrenchment and firm performance while focusing on the mitigating effects of corporate governance practices. This research is conducted in Canada covering a six-year period from 2002 to 2007 and uses panel data from 334 S%P/TSX firms. The quality of firm-level governance is measured based on the ROB index published by The Globe and Mail. The measurement of controlling shareholder entrenchment is based on voting rights and the wedge between voting and cash-flow rights. Using fixed-effect regressions, we find strong evidence that the negative impact of entrenchment on firm performance is attenuated when corporate governance practices are strong.

Suggested Citation

  • Jackie Di Vito & Yves Bozec, 2012. "Controlling shareholder entrenchment, corporate governance and corporate performance," International Journal of Accounting and Finance, Inderscience Enterprises Ltd, vol. 3(3), pages 273-289.
    • Handle: RePEc:ids:intjaf:v:3:y:2012:i:3:p:273-289
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    Cited by:

    1. Yike Yu & Danting Cao & Zuogong Wang & Zaijie Zhang, 2021. "Does the fellow‐villager relationship between the independent director and the chairman of the board can inhibit the major shareholder expropriation? Evidence from China," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 42(6), pages 1374-1393, September.
    2. Sheeba Kapil & Rakesh K Mishra, 2019. "Corporate Governance structure and firm performance in Indian context: A Structural Equation Modelling Approach," Working Papers 1937, Indian Institute of Foreign Trade.

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