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On the relationship between corporate governance and value creation in an economic crisis: Empirical evidence for the Spanish case

Author

Listed:
  • Santiago Lago-Peñas
  • Elena Rivo-López
  • Mónica Villanueva-Villar

Abstract

This paper analyses the effect of corporate governance on value creation. It relies upon a dataset that includes the companies listed on the Spanish Stock Exchange for the period from 2005 to 2012. Attention is focused on the structure and composition of boards. In particular, four variables are analysed: board_size, board_independence, board_diligence (measured by the number of meetings), and duality (chairman and chief executive officer being the same person). Over the period of the deepest economic crisis (2009-2012) the most significant variables that had a positive effect on value creation were board_independence and board_size. The global financial crisis has highlighted the need for effective corporate governance. Policy makers should think about translating the recommendations of the Good Governance Codes into legislation (mandatory), to improve corporate governance

Suggested Citation

  • Santiago Lago-Peñas & Elena Rivo-López & Mónica Villanueva-Villar, 2016. "On the relationship between corporate governance and value creation in an economic crisis: Empirical evidence for the Spanish case," Working Papers. Collection C: Family business 1602, Universidade de Vigo, GEN - Governance and Economics research Network.
  • Handle: RePEc:gov:wpfami:1602
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    File URL: http://infogen.webs.uvigo.es/WPC/WP1602.pdf
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    References listed on IDEAS

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    More about this item

    Keywords

    Corporate Governance; Value Creation; Board; Economic Crisis; Independence;

    JEL classification:

    • 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
    • H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government

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