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Substitutability and complementarity of corporate governance mechanisms in Latin America

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  • Cueto, Diego C.

Abstract

This research analyzes the relations between highly concentrated ownership structures, corporate governance mechanisms and firm value for a sample of Latin American firms. With concentrated ownership, the conflict of interest shifts from the principal-agent problem to a dominant-minority shareholder focus. To minimize the negative effects of ownership concentration on firm value, Latin American firms resort to a number of different corporate governance mechanisms including measures for leverage, takeover activity, board size, board independence, cross-listing, single/multiple-class shares, and the dual role of the CEO as chairman of the board. In addition, institutional investors assume monitoring roles and help curtailing asset expropriation.

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  • Cueto, Diego C., 2013. "Substitutability and complementarity of corporate governance mechanisms in Latin America," International Review of Economics & Finance, Elsevier, vol. 25(C), pages 310-325.
  • Handle: RePEc:eee:reveco:v:25:y:2013:i:c:p:310-325
    DOI: 10.1016/j.iref.2012.07.008
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    5. Liew, Chee Yoong & Devi, S.Susela, 2020. "Family Firms, Banks and Firm Value: Evidence from Malaysia," MPRA Paper 99704, University Library of Munich, Germany.
    6. Chen, Chao-Jung & Hsu, Chung-Yuan & Chen, Yu-Lin, 2014. "The impact of family control on the top management compensation mix and incentive orientation," International Review of Economics & Finance, Elsevier, vol. 32(C), pages 29-46.
    7. Wang, Jin-Ying, 2014. "Controlling shareholder entrenchment: Bonuses versus dividends," International Review of Economics & Finance, Elsevier, vol. 32(C), pages 143-158.
    8. Miguel Jaimes-Valdez & Carlos A. Jacobo-Hernandez & Sergio Ochoa-Jimenez, 2017. "Corporate Governance: International Context and Trends from 2005 to 2015," International Journal of Business and Management, Canadian Center of Science and Education, vol. 12(3), pages 158-158, February.
    9. Chi, Ching Wen & Hung, Ken & Cheng, Hui Wen & Tien Lieu, Pang, 2015. "Family firms and earnings management in Taiwan: Influence of corporate governance," International Review of Economics & Finance, Elsevier, vol. 36(C), pages 88-98.

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    More about this item

    Keywords

    Corporate governance theories; Business groups; Latin American economies; Shareholder value;
    All these keywords.

    JEL classification:

    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance

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