The Determinants of the German Corporate Governance Rating
AbstractThis paper analyzes the determinants of the German corporate governance rating recently developed by Drobetz, Schillhofer, and Zimmermann (2004). We find a non- linear relationship between ownership concentration and the quality of firmlevel corporate governance as measured by the rating. Firms with larger boards of directors have lower governance ratings, but firms that apply US-GAAP or IAS rules and/or use an option-based remuneration plan have higher corporate governance ratings. Our results question the comply-or-explain principle embedded in recent corporate governance codes and call for a more rules-based approach in improving corporate governance in Europe.
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Bibliographic InfoPaper provided by Faculty of Business and Economics - University of Basel in its series Working papers with number 2004/06.
Date of creation: 2004
Date of revision:
Corporate governance; endogeneity; ownership structure; board size; accounting principles; executive compensation.;
Find related papers by JEL classification:
- G12 - Financial Economics - - General Financial Markets - - - Asset Pricing; Trading Volume; Bond Interest Rates
- G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
- G38 - Financial Economics - - Corporate Finance and Governance - - - Government Policy and Regulation
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- Marco Becht & Fabrizio Barca, 2001. "The control of corporate Europe," ULB Institutional Repository 2013/13302, ULB -- Universite Libre de Bruxelles.
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