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Alternative vs Traditional Corporate Governance Systems in Italy: An Empirical Analysis

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  • Bellavite Pellegrini, Carlo
  • Pellegrini, Laura
  • Sironi, Emiliano

Abstract

The 2003 Italian Corporate Law Reform, establishing one-tier vs. two-tier board for listed and unlisted joint stock companies, introduced alternative corporate governance systems. This study implements probit regressions in order to compare 548 unlisted firms: corporations with best performances in sales and capital structure, as well as those under “control and coordination”, maintain a traditional system. Conversely, firms with a high proportion of individual shareholders adopt alternative systems. For alternative system firms, split between one-tier and two-tier boards, companies under “control and coordination” action tend to implement a one-tier system, same as firms with a higher proportion of individual shareholders.

Suggested Citation

  • Bellavite Pellegrini, Carlo & Pellegrini, Laura & Sironi, Emiliano, 2010. "Alternative vs Traditional Corporate Governance Systems in Italy: An Empirical Analysis," MPRA Paper 104656, University Library of Munich, Germany, revised 2010.
    • Handle: RePEc:pra:mprapa:104656
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    File URL: https://mpra.ub.uni-muenchen.de/104656/1/MPRA_paper_104656.pdf
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    References listed on IDEAS

    as
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    6. Jensen, Michael C. & Meckling, William H., 1976. "Theory of the firm: Managerial behavior, agency costs and ownership structure," Journal of Financial Economics, Elsevier, vol. 3(4), pages 305-360, October.
    7. Shleifer, Andrei & Vishny, Robert W, 1997. "The Limits of Arbitrage," Journal of Finance, American Finance Association, vol. 52(1), pages 35-55, March.
    8. Henry G. Manne, 1965. "Mergers and the Market for Corporate Control," Journal of Political Economy, University of Chicago Press, vol. 73(4), pages 351-351.
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    Cited by:

    1. Bellavite Pellegrini, Carlo, 2013. "An empirical analysis of “Corporate Italy”: legal entities, financial and ownership structure and corporate governance 2004-2012," MPRA Paper 104652, University Library of Munich, Germany, revised 2013.
    2. Bellavite Pellegrini, Carlo & Sergi, Bruno & Sironi, Emiliano, 2015. "The Effect of the Adoption of an Alternative Corporate Governance System on Firms’ Performances. The Case of Italian Unlisted SMEs," MPRA Paper 104648, University Library of Munich, Germany, revised 20 Oct 2015.

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    More about this item

    Keywords

    corporate governance; one-tier board; two-tier board;
    All these keywords.

    JEL classification:

    • G3 - Financial Economics - - Corporate Finance and Governance

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