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Corporate Governance, Industry Dynamics and Firm Perfomance : an Empirical Analysis of a Best Practice Model

Author

Listed:
  • Jackie KRAFFT

    (University of Nice Sophia Antipolis, CNRS-GREDEG)

  • Yiping QU

    (University of Nice Sophia Antipolis, CNRS-GREDEG)

  • Jacques-Laurent RAVIX

    (University of Nice Sophia Antipolis, CNRS-GREDEG)

Abstract

This papers intends to relate more closely corporate governance, industry dynamics and firms performance. In this perspective, it focuses on the impact of applying the normative, best pratice, shareholder value model of corporate governance on industry dynamics and related performance measured by economic as well as financial indicators. At a theoritical level the paper presents an integrated framework based on the connaction between firms governance and industry dynamics issues. But the core of the paper is to advance that the combination of corporate governance and industry dynamics also requires important investigations into empirical aspects. At a case study level, our major finding is that the adoption of the best practice model of governance in the telecoms equipment supplier industry contributed to create large ups and downs in the industry dynamics affecting both economic and financial perfomances. At a more general level, combining two different datasets Corporate governance Quotient ( CGQ) and DATASTREAM, we show the variegated impact of the normative model on industry dynamics and confirm the observed phenomenon of ups and downs amplifications formerly emphasized, at least at the level of stock market perfomance.

Suggested Citation

  • Jackie KRAFFT & Yiping QU & Jacques-Laurent RAVIX, 2008. "Corporate Governance, Industry Dynamics and Firm Perfomance : an Empirical Analysis of a Best Practice Model," Discussion Papers (REL - Recherches Economiques de Louvain) 2008042, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
  • Handle: RePEc:ctl:louvre:2008042
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    References listed on IDEAS

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    1. Janeba, Eckhard, 1998. "Tax competition in imperfectly competitive markets," Journal of International Economics, Elsevier, vol. 44(1), pages 135-153, February.
    2. Benoît Mulkay & Bronwyn H, Hall & Jacques Mairesse, 2000. "Firm Level Investment and R&D in France and the United States : A Comparison," Working Papers 2000-49, Center for Research in Economics and Statistics.
    3. Docquier, Frédéric & Faye, Ousmane & Pestieau, Pierre, 2008. "Is migration a good substitute for education subsidies?," Journal of Development Economics, Elsevier, pages 263-276.
    4. Guglielmo Maria Caporale, 2005. "The BDS Test as a Test for the Adequacy of a GARCH(1,1) Specification: A Monte Carlo Study," Journal of Financial Econometrics, Society for Financial Econometrics, pages 282-309.
    5. Russell Cooper & Andrew John, 1988. "Coordinating Coordination Failures in Keynesian Models," The Quarterly Journal of Economics, Oxford University Press, vol. 103(3), pages 441-463.
    6. Acemoglu, D., 1994. "Search in the Labor market: Incomplete Contracts and Growth," Working papers 94-23, Massachusetts Institute of Technology (MIT), Department of Economics.
    7. Guido Cozzi, 2003. "The Self-fulfilling International Allocation of Innovation," Levine's Bibliography 666156000000000189, UCLA Department of Economics.
    8. Stark, Oded & Wang, Yong, 2002. "Inducing human capital formation: migration as a substitute for subsidies," Journal of Public Economics, Elsevier, pages 29-46.
    9. Acemoglu, D., 1994. "Search in the Labor market: Incomplete Contracts and Growth," Working papers 94-23, Massachusetts Institute of Technology (MIT), Department of Economics.
    10. Beine, Michel & Docquier, Frederic & Rapoport, Hillel, 2001. "Brain drain and economic growth: theory and evidence," Journal of Development Economics, Elsevier, pages 275-289.
    11. Beine, Michel & Docquier, Frederic & Rapoport, Hillel, 2001. "Brain drain and economic growth: theory and evidence," Journal of Development Economics, Elsevier, pages 275-289.
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    Citations

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    Cited by:

    1. Jackie Krafft & Yiping Qu & Francesco Quatraro & Jacques-Laurent Ravix, 2014. "Corporate governance, value and performance of firms: new empirical results on convergence from a large international database," Industrial and Corporate Change, Oxford University Press, pages 361-397.
    2. Jackie Krafft & Yiping Qu & Jacques-Laurent Ravix, 2011. "Gouvernance d'entreprise et performances sectorielles : une réévaluation de la fiabilité des scores et des mesures de bonne gouvernance," Economie & Prévision, La Documentation Française, pages 145-158.
    3. repec:hal:wpaper:hal-00786664 is not listed on IDEAS

    More about this item

    Keywords

    corporate gouvernance; industry dynamics; fim performance; stock markets; innovative versus traditional industries;

    JEL classification:

    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • L20 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - General
    • L60 - Industrial Organization - - Industry Studies: Manufacturing - - - General
    • L80 - Industrial Organization - - Industry Studies: Services - - - General
    • L90 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - General

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