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What drives corporate governance? Firm-level evidence from Eastern Europe

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Author Info

  • Klapper, Leora F
  • Laeven, Luc
  • Love, Inessa

Abstract

The authors study differences in the use of two corporate governance provisions - cumulative voting and proxy by mail voting - in a sample of 224 firms located in four Eastern European countries. Thereport finds a significant relationship between ownership structure, and the use of corporate governance provisions. Firms with a controlling owner (owning more than 50 percent of shares) are less likely to adopt either of the two provisions. However, firms that have large, minority shareholders are more likely to adopt these provisions. The authors do not find any significant relationship between the use of these provisions, and foreign ownership. The results suggest that the decision to adopt these corporate governance provisions is influenced by large, minority shareholders in their battle for representation in the board, and in managerial decisions.

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Bibliographic Info

Paper provided by The World Bank in its series Policy Research Working Paper Series with number 3600.

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Date of creation: 01 May 2005
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Handle: RePEc:wbk:wbrwps:3600

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Related research

Keywords: Microfinance; Small Scale Enterprise; Financial Crisis Management&Restructuring; National Governance; Private Participation in Infrastructure;

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References

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Citations

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Cited by:
  1. Paul Schure & Francesco Passerelli & David Scoones, 2007. "When the Powerful Drag Their Feet," Department Discussion Papers 0703, Department of Economics, University of Victoria.
  2. Irena Grosfeld, 2006. "Ownership concentration and firm performance: Evidence from an emerging market," PSE Working Papers halshs-00590485, HAL.
  3. Rene M. Stulz, 2006. "Financial Globalization, Corporate Governance, and Eastern Europe," NBER Working Papers 11912, National Bureau of Economic Research, Inc.
  4. Grosfeld, Irena, 2009. "Large shareholders and firm value: Are high-tech firms different?," Economic Systems, Elsevier, vol. 33(3), pages 259-277, September.
  5. Irena Grosfeld, 2006. "Ownership concentration & firm performance: Evidence from an emerging market," William Davidson Institute Working Papers Series wp834, William Davidson Institute at the University of Michigan.
  6. Tulbure, Narcis & Catarama, Delia, 2009. "Institutional and Socio-Cultural Factors Explaining the Development of Mutual Funds. A Cross-Country Analysis," MPRA Paper 20341, University Library of Munich, Germany.

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