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Does culture affect corporate governance?


  • Gantenbein, Pascal

    () (University of Basel)

  • Volonté, Christophe

    () (University of Basel)


The legal environment is one important determinant of corporate governance. However, within legal families, also cultural differences can explain the level of corporate governance to some extent. We analyze this relationship for the case of Switzerland. Swiss firms are mainly located in two cultural areas, the German and French speaking parts of Switzerland. Swiss federal law is equal in both regions which allows us to investigate the effect of cultural differences on corporate governance. Although we only find few differences, we observe that board composition is significantly driven by language-related factors: French-speaking directors are prevalent in Swiss French boards and German-speaking directors in Swiss German boards. More importantly, however, boards of these two parts of Switzerland are more likely to be structured as in their respective neighboring countries. Furthermore, in the French part, transfer restrictions of shares are more common.

Suggested Citation

  • Gantenbein, Pascal & Volonté, Christophe, 2012. "Does culture affect corporate governance?," Working papers 2012/04, Faculty of Business and Economics - University of Basel.
  • Handle: RePEc:bsl:wpaper:2012/04

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    References listed on IDEAS

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    6. ., 2008. "The Rule of Law and Capitalism: An Overview," Chapters, in: Law, Informal Rules and Economic Performance, chapter 9, Edward Elgar Publishing.
    7. ., 2008. "Capitalism and the Rule of Law," Chapters, in: Law, Informal Rules and Economic Performance, chapter 4, Edward Elgar Publishing.
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    More about this item


    Corporate governance; culture; law; board of directors; ownership structure;

    JEL classification:

    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • 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
    • G38 - Financial Economics - - Corporate Finance and Governance - - - Government Policy and Regulation
    • Z10 - Other Special Topics - - Cultural Economics - - - General

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