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The political economy of corporate governance in developing economies: The case of Bangladesh

  • Haque, Faizul
  • Arun, Thankom
  • Kirkpatrick, Colin

The paper investigates the influence of concentrated shareholding, boardroom politics and interest group politics in the quality of corporate governance in listed firms. It finds that the controlling shareholders exert influence in boardroom politics through family-aligned board and executive management. The evidence shows that concentrated ownership, family-aligned board and management, and political connection(s) of the controlling shareholder(s) tend to be inversely associated with the quality of corporate governance in a firm. The findings of the study suggest that the broad-based interest group politics which influence both political preference and corporate control politics contribute significantly to the current state of corporate governance in developing economies.

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Article provided by Elsevier in its journal Research in International Business and Finance.

Volume (Year): 25 (2011)
Issue (Month): 2 (June)
Pages: 169-182

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Handle: RePEc:eee:riibaf:v:25:y:2011:i:2:p:169-182
Contact details of provider: Web page: http://www.elsevier.com/locate/ribaf

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  1. Rafael La Porta & Florencio Lopez-de-Silane & Andrei Shleifer & Robert W. Vishny, 1996. "Law and Finance," NBER Working Papers 5661, National Bureau of Economic Research, Inc.
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  5. L.-A. Busch & A. Muthoo, 2003. "Power and Inefficient Institutions," Economics Discussion Papers 561, University of Essex, Department of Economics.
  6. Pagano, Marco & Volpin, Paolo, 2002. "Managers, Workers and Corporate Control," CEPR Discussion Papers 3649, C.E.P.R. Discussion Papers.
  7. Andrei Shleifer & Robert W. Vishny, 1995. "A Survey of Corporate Governance," Harvard Institute of Economic Research Working Papers 1741, Harvard - Institute of Economic Research.
  8. Klapper, Leora F. & Love, Inessa, 2004. "Corporate governance, investor protection, and performance in emerging markets," Journal of Corporate Finance, Elsevier, vol. 10(5), pages 703-728, November.
  9. Mark J. Roe & Jordan I. Siegel, 2009. "Finance and Politics: A Review Essay Based on Kenneth Dam's Analysis of Legal Traditions in The Law-Growth Nexus," Journal of Economic Literature, American Economic Association, vol. 47(3), pages 781-800, September.
  10. Charles Oman & Daniel Blume, 2005. "Corporate Governance: A Development Challenge," OECD Development Centre Policy Insights 3, OECD Publishing.
  11. B. Cheffins, 2001. "History and the Global Corporate Governance Revolution: The UK Perspective," Business History, Taylor & Francis Journals, vol. 43(4), pages 87-118.
  12. Fama, Eugene F & Jensen, Michael C, 1983. "Separation of Ownership and Control," Journal of Law and Economics, University of Chicago Press, vol. 26(2), pages 301-25, June.
  13. Larry H. P. Lang & Mara Faccio & Leslie Young, 2001. "Dividends and Expropriation," American Economic Review, American Economic Association, vol. 91(1), pages 54-78, March.
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