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Is corporate governance ineffective in emerging markets?

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  • Michael S. Gibson

Abstract

I test whether corporate governance is ineffective in emerging markets by estimating the link between CEO turnover and firm performance for over 1,200 firms in eight emerging markets. I find two main results. First, CEOs of emerging market firms are more likely to lose their jobs when their firm's performance is poor, suggesting that corporate governance is not ineffective in emerging markets. Second, for the subset of firms with a large domestic shareholder, there is no link between CEO turnover and firm performance. For this subset of emerging market firms, corporate governance appears to be ineffective. ; This is a new version of this paper dated December 2002; previous version was dated November 1999.

Suggested Citation

  • Michael S. Gibson, 1999. "Is corporate governance ineffective in emerging markets?," Finance and Economics Discussion Series 1999-63, Board of Governors of the Federal Reserve System (U.S.).
  • Handle: RePEc:fip:fedgfe:1999-63
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    References listed on IDEAS

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    Cited by:

    1. Ciner, Cetin & Karagozoglu, Ahmet K., 2008. "Information asymmetry, speculation and foreign trading activity: Emerging market evidence," International Review of Financial Analysis, Elsevier, vol. 17(4), pages 664-680, September.
    2. Emilio Barucci & Carlo Bianchi & Mirko Frediani, 2006. "CEO Turnover in the Italian Financial Market," Giornale degli Economisti, GDE (Giornale degli Economisti e Annali di Economia), Bocconi University, vol. 65(2), pages 127-154, November.
    3. Volpin, Paolo F., 2002. "Governance with poor investor protection: evidence from top executive turnover in Italy," Journal of Financial Economics, Elsevier, vol. 64(1), pages 61-90, April.
    4. Gordon de Brouwer, 2003. "Macroeconomics and Governance," Treasury Working Papers 2003-04, The Treasury, Australian Government, revised Dec 2003.

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    Keywords

    Developing countries ; Corporations;

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