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Royal Ahold: a failure of corporate governance and an accounting scandal

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Author Info
Jong, Abe de
DeJong, Douglas V.
Mertens, Gerard
..., (Tilburg University, Center for Economic Research)
Abstract

Royal Ahold (Koninklijke Ahold NV) was one of the major success stories in the 1990s and is one of the major failures, suffering a complete meltdown, in 2003. We investigate the strategy, accounting transparency and corporate governance of Ahold; elements which jointly drive the firm s performance over this period of time. In general, the corporate governance, accounting transparency, strategy and firm performance relationships are complex. There is not a fully specified model available to address the inter-relationships, including the endogeneity problem. The econometrics are difficult and constrained not only by the lack of a fully specified theory but also by data availability. Our clinical study overcomes these problems by providing an in-depth analysis of the inter-relationships among corporate governance, accounting transparency and strategy that lead to Ahold s downfall. We provide insights into these relationships and their complexity that present theory and empirical studies cannot address.

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Paper provided by Tilburg University, Center for Economic Research in its series Discussion Paper with number 57.

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Date of creation: 2005
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Handle: RePEc:dgr:kubcen:200557

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Find related papers by JEL classification:
F36 - International Economics - - International Finance - - - Financial Aspects of Economic Integration
G38 - Financial Economics - - Corporate Finance and Governance - - - Government Policy and Regulation
K22 - Law and Economics - - Regulation and Business Law - - - Corporation and Securities Law
M40 - Business Administration and Business Economics; Marketing; Accounting - - Accounting - - - General

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