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How does globalization affect corporate governance and accountability? A perspective from MNEs

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  • Luo, Yadong

Abstract

This paper addresses how the global activities undertaken by multinational enterprises (MNEs) in international settings impact corporate governance mechanisms and accountability systems. International corporate governance and accountability research, whether from a political science, economics, finance, or accounting perspective, has thus far predominantly focused on the comparison of corporate governance schemes in different countries and on the investigation of institutional parameters that determine these schemes. Straying from this line of inquiry, this article discusses how globalization at the firm level affects governance and accountability systems at parent- and subsidiary-levels. It emphasizes how an MNE's globalization attributes such as globalization scale, foreign adaptation, global competition, and international experience influence the design of governance mechanisms such as board size, board composition, executive compensation, market discipline, interlocking directorate, ownership concentration, duality and inbreeding, as well as the design of accountability systems such as accounting information, auditing standards, and financial and non-financial disclosures. This article bases its conjectures on information processing and agency theories.

Suggested Citation

  • Luo, Yadong, 2005. "How does globalization affect corporate governance and accountability? A perspective from MNEs," Journal of International Management, Elsevier, vol. 11(1), pages 19-41, March.
  • Handle: RePEc:eee:intman:v:11:y:2005:i:1:p:19-41
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    References listed on IDEAS

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    2. repec:spr:manint:v:50:y:2010:i:2:d:10.1007_s11575-010-0029-0 is not listed on IDEAS
    3. Winkler, Jens & Kuklinski, Christian Paul Jian-Wei & Moser, Roger, 2015. "Decision making in emerging markets: The Delphi approach's contribution to coping with uncertainty and equivocality," Journal of Business Research, Elsevier, vol. 68(5), pages 1118-1126.
    4. Schmid, Stefan & Dauth, Tobias, 2014. "Does internationalization make a difference? Stock market reaction to announcements of international top executive appointments," Journal of World Business, Elsevier, pages 63-77.
    5. repec:eee:iburev:v:27:y:2018:i:1:p:34-45 is not listed on IDEAS
    6. Moser, Roger & Kuklinski, Christian Paul Jian-Wei & Srivastava, Mohit, 2017. "Information processing fit in the context of emerging markets: An analysis of foreign SBUs in China," Journal of Business Research, Elsevier, vol. 70(C), pages 234-247.
    7. repec:eee:spacre:v:17:y:2014:i:1:p:5-16 is not listed on IDEAS
    8. Greve, Peder & Biemann, Torsten & Ruigrok, Winfried, 2015. "Foreign executive appointments: A multilevel examination," Journal of World Business, Elsevier, pages 674-686.
    9. Oxelheim, Lars & Gregori, Aleksandra & Randøy, Trond & Thomsen, Steen, 2013. "On the Internationalization of Corporate Boards," Working Paper Series 951, Research Institute of Industrial Economics.
    10. Riaz, Zahid & Ray, Sangeeta & Ray, Pradeep Kanta & Kumar, Vikas, 2015. "Disclosure practices of foreign and domestic firms in Australia," Journal of World Business, Elsevier, pages 781-792.
    11. repec:eee:iburev:v:27:y:2018:i:1:p:269-280 is not listed on IDEAS
    12. Assenso-Okofo, Oheneba & Ali, Muhammad Jahangir & Ahmed, Kamran, 2011. "The Development of Accounting and Reporting in Ghana," The International Journal of Accounting, Elsevier, vol. 46(4), pages 459-480.
    13. Piekkari, Rebecca & Oxelheim, Lars & Randøy, Trond, 2013. "The Role of Language in Corporate Governance: The Case of Board Internationalization," Working Paper Series 974, Research Institute of Industrial Economics.

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