IDEAS home Printed from https://ideas.repec.org/p/idb/wpaper/3218.html

Corporate Governance in Costa Rica

Author

Listed:
  • Gilberto E. Arce
  • Edgar Robles C.

Abstract

This paper examines corporate governance practices in Costa Rica. First, it estimates corporate governance charter measures using firm-level data for 87 Costa Rican firms and studies their impact on the firms` performance; here, the mean of the corporate governance charters for the publicly traded firms is equal to 56. 14. Second, new evidence is presented on de jure and de facto corporate governance charter measures at the firm level and on their effect on the performance of the firm. The results indicate that de facto corporate governance is better than de jure corporate governance. These results suggest that firms must implement a set of additional measures to compensate for the weakness of the legal environment. Also, evidence is presented that better corporate governance and charter measures are associated with superior firm performance. Third, this paper examines the final controllers of publicly and non-publicly traded firms and links them with their dividend policies. Family firms are common in Costa Rica and are not necessarily linked to better firm performance. Fourth, the ownership evolution of Costa Rican firms is studied. Finally, changes in the Commercial Code are examined from a good corporate governance practices view.

Suggested Citation

  • Gilberto E. Arce & Edgar Robles C., 2005. "Corporate Governance in Costa Rica," Research Department Publications 3218, Inter-American Development Bank, Research Department.
    • Handle: RePEc:idb:wpaper:3218
    as

    Download full text from publisher

    File URL: http://www.iadb.org/research/pub_hits.cfm?pub_id=R-519&pub_file_name=pubR-519.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Charles P. Oman, 2001. "Corporate Governance and National Development," OECD Development Centre Working Papers 180, OECD Publishing.
    2. Mike Burkart & Fausto Panunzi & Andrei Shleifer, 2003. "Family Firms," Journal of Finance, American Finance Association, vol. 58(5), pages 2167-2201, October.
    3. Rafael La Porta & Florencio Lopez‐De‐Silanes & Andrei Shleifer, 1999. "Corporate Ownership Around the World," Journal of Finance, American Finance Association, vol. 54(2), pages 471-517, April.
    4. Alexander Monge-Naranjo & Javier Cascante & Luis J. Hall, 2001. "Enforcement, Contract Design, and Default: Exploring the Financial Markets of Costa Rica," Research Department Publications 3126, Inter-American Development Bank, Research Department.
    5. Tirole, Jean, 2001. "Corporate Governance," Econometrica, Econometric Society, vol. 69(1), pages 1-35, January.
    6. Benjamin E. Hermalin & Michael S. Weisbach, 1991. "The Effects of Board Composition and Direct Incentives on Firm Performance," Financial Management, Financial Management Association, vol. 20(4), Winter.
    7. Shleifer, Andrei & Vishny, Robert W, 1997. "A Survey of Corporate Governance," Journal of Finance, American Finance Association, vol. 52(2), pages 737-783, June.
    8. Johnson, Simon & Boone, Peter & Breach, Alasdair & Friedman, Eric, 2000. "Corporate governance in the Asian financial crisis," Journal of Financial Economics, Elsevier, vol. 58(1-2), pages 141-186.
    9. Bengt Holmstrom & Steven N. Kaplan, 2001. "Corporate Governance and Merger Activity in the United States: Making Sense of the 1980s and 1990s," Journal of Economic Perspectives, American Economic Association, vol. 15(2), pages 121-144, Spring.
    10. Berkowitz, Daniel & Pistor, Katharina & Richard, Jean-Francois, 2003. "Economic development, legality, and the transplant effect," European Economic Review, Elsevier, vol. 47(1), pages 165-195, February.
    11. Demsetz, Harold & Lehn, Kenneth, 1985. "The Structure of Corporate Ownership: Causes and Consequences," Journal of Political Economy, University of Chicago Press, vol. 93(6), pages 1155-1177, December.
    12. Rafael La Porta & Florencio Lopez-de-Silanes & Andrei Shleifer & Robert W. Vishny, 1998. "Law and Finance," Journal of Political Economy, University of Chicago Press, vol. 106(6), pages 1113-1155, December.
    13. Bengt Holmstrom & Steven N. Kaplan, 2003. "The State Of U.S. Corporate Governance: What'S Right And What'S Wrong?," Journal of Applied Corporate Finance, Morgan Stanley, vol. 15(3), pages 8-20, March.
    14. Paul Gompers & Joy Ishii & Andrew Metrick, 2003. "Corporate Governance and Equity Prices," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 118(1), pages 107-156.
    15. 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.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Gilberto E. Arce & Edgar Robles C., 2005. "Gobierno Corporativo en Costa Rica," Research Department Publications 3219, Inter-American Development Bank, Research Department.
    2. Chen, I-Ju, 2014. "Financial crisis and the dynamics of corporate governance: Evidence from Taiwan's listed firms," International Review of Economics & Finance, Elsevier, vol. 32(C), pages 3-28.
    3. Izquierdo, Alejandro & Micco, Alejandro & Panizza, Ugo & Chong, Alberto E., 2003. "Corporate Governance and Private Capital Flows to Latin America," IDB Publications (Working Papers) 1457, Inter-American Development Bank.
    4. Attiya Y. Javid & Robina Iqbal, 2010. "Corporate Governance in Pakistan : Corporate Valuation, Ownership and Financing," Governance Working Papers 22830, East Asian Bureau of Economic Research.
    5. Loukas Spanos, 2005. "Corporate governance in Greece: developments and policy implications," Finance 0502017, University Library of Munich, Germany.
    6. Naeem Tabassum & Satwinder Singh, 2020. "Corporate Governance and Organisational Performance," Springer Books, Springer, number 978-3-030-48527-6, January.
    7. Laeven, Luc & Chhaochharia, Vidhi, 2007. "The Invisible Hand in Corporate Governance," CEPR Discussion Papers 6256, C.E.P.R. Discussion Papers.
    8. Claessens, Stijn & Yurtoglu, B. Burcin, 2013. "Corporate governance in emerging markets: A survey," Emerging Markets Review, Elsevier, vol. 15(C), pages 1-33.
    9. Alberto Chong & Alejandro Izquierdo & Alejandro Micco & Ugo Panizza, 2003. "Conducción empresarial y flujos de capitales privados hacia América Latina," Research Department Publications 4324, Inter-American Development Bank, Research Department.
    10. Andriosopoulos, Dimitris & Panetsidou, Styliani, 2021. "A global analysis of Private Investments in Public Equity," Journal of Corporate Finance, Elsevier, vol. 69(C).
    11. Andrew Ellul & Levent Guntay & Ugur Lel, 2007. "External governance and debt agency costs of family firms," International Finance Discussion Papers 908, Board of Governors of the Federal Reserve System (U.S.).
    12. Goergen, Marc & Manjon, Miguel C. & Renneboog, Luc, 2008. "Recent developments in German corporate governance," International Review of Law and Economics, Elsevier, vol. 28(3), pages 175-193, September.
    13. Mike Peng & Yi Jiang, 2006. "Family Ownership And Control In Large Firms: The Good, The Bad, The Irrelevant ??? And Why," William Davidson Institute Working Papers Series wp840, William Davidson Institute at the University of Michigan.
    14. Amitava Roy, 2014. "Corporate Governance and Firm Performance: An Exploratory Analysis of Indian Listed Companies," Jindal Journal of Business Research, , vol. 3(1-2), pages 93-120, June.
    15. Dahya, Jay & Dimitrov, Orlin & McConnell, John J., 2008. "Dominant shareholders, corporate boards, and corporate value: A cross-country analysis," Journal of Financial Economics, Elsevier, vol. 87(1), pages 73-100, January.
    16. Premepeh, kwadwo Boateng & Odartei-Mills, Eugene, 2015. "Corporate governance structure and shareholder wealth maximisation," MPRA Paper 68087, University Library of Munich, Germany.
    17. André Luiz Carvalhal da Silva & Ricardo Pereira Câmara Leal, 2005. "Corporate Governance Index, Firm Valuation and Performance in Brazil," Brazilian Review of Finance, Brazilian Society of Finance, vol. 3(1), pages 1-18.
    18. Art Durnev & E. Han Kim, 2003. "Corporate Stability and Economic Growth," William Davidson Institute Working Papers Series 554, William Davidson Institute at the University of Michigan.
    19. Adrian C. H. Lei & Frank M. Song, 2012. "Board structure, corporate governance and firm value: evidence from Hong Kong," Applied Financial Economics, Taylor & Francis Journals, vol. 22(15), pages 1289-1303, August.
    20. Aldrighi, Dante Mendes, 2003. "The Mechanisms of Corporate Governance in the United States: an Assessment," Revista Brasileira de Economia - RBE, EPGE Brazilian School of Economics and Finance - FGV EPGE (Brazil), vol. 57(3), July.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:idb:wpaper:3218. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Felipe Herrera Library (email available below). General contact details of provider: https://edirc.repec.org/data/iadbbus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.