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Governance Codes: Facts Or Fictions? A Study Of Governance Codes In Colombia







This article studies the effects on accounting performance and financing decisions of Colombian firms after issuing a corporate governance code. We assemble a database of Colombian issuers and test the hypotheses of improved performance and higher leverage after issuing a code. The results show that the firms´ return on assets after the code introduction improves in excess of 1%; the effect is amplified by the code quality. Additionally, the firms leverage increased, in excess of 5%, when the code quality was factored into the analysis. These results suggest that controlling parties commitment to self restrain, by reducing their private benefits and/or the expropriation of non controlling parties, through the code introduction, is indeed an effective measure and that the financial markets agree, increasing the supply of funds to the firms.

Suggested Citation

  • Julián Benavides Franco* & Samuel Mongrut Montalván, 2010. "Governance Codes: Facts Or Fictions? A Study Of Governance Codes In Colombia," ESTUDIOS GERENCIALES, UNIVERSIDAD ICESI, December.
  • Handle: RePEc:col:000129:008473

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    References listed on IDEAS

    1. Marek Gruszczynski, 2006. "Corporate Governance and Financial Performance of Companies in Poland," International Advances in Economic Research, Springer;International Atlantic Economic Society, vol. 12(2), pages 251-259, May.
    2. Andrés Langebaek & Jaime Eduardo Ortíz, 2007. "Q De Tobin Y Gobierno Corporativo De Las Empresas Listadas En Bolsa," BORRADORES DE ECONOMIA 003960, BANCO DE LA REPÚBLICA.
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    More about this item


    Corporate governance; governance codes; agency theory; accounting performance; leverage.;

    JEL classification:

    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • M48 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Government Policy and Regulation
    • K22 - Law and Economics - - Regulation and Business Law - - - Business and Securities Law


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