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Governance and the corporate life-cycle

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  • Thomas O'Connor

    ()
    (Department of Economics Finance and Accounting, National University of Ireland, Maynooth)

  • Julie Byrne

    (Department of Economics Finance and Entrepreneurship, Business School,Dublin City University)

Abstract

Purpose – The purpose of this research is to examine whether corporate governance changes along the corporate life-cycle. Design/methodology/approach – In a sample of 205 firms from 21 emerging market countries and using a life-cycle proxy from the dividends literature, we use a governance-prediction model which examines whether corporate governance differs along the corporate life-cycle. Findings – Mature firms tend to practice better overall corporate governance. Discipline and independence improve as firms mature. Firms tend to be most transparent and accountable when they are young. These findings suggest that the resource/strategy and monitoring/control governance functions are relevant but at different life-cycle stages. Research limitations/implications – In the absence of longitudinal governance data with sufficient coverage to track within-firm changes in corporate governance along the corporate life-cycle, we analyze differences in corporate governance between-firms at different life-cycle stages. Originality/value – We use an alternative, yet new measure from the dividends literature to account for the firm’s position along the corporate life-cycle. With this new measure, our findings are in line with the predictions of Filatotchev et al. (2006).

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Bibliographic Info

Paper provided by Department of Economics, Finance and Accounting, National University of Ireland - Maynooth in its series Economics, Finance and Accounting Department Working Paper Series with number n248-13.pdf.

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Length: 25 pages
Date of creation: 2013
Date of revision:
Handle: RePEc:may:mayecw:n248-13.pdf

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Postal: Maynooth, Co. Kildare
Phone: 353-1-7083728
Fax: 353-1-7083934
Web page: http://economics.nuim.ie
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Keywords: Corporate governance; corporate life-cycle; emerging markets.;

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