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Corporate Governance Mechanisms and Their Impact on Managerial Value



Previous studies have cast doubts on the effectiveness of the application of corporate governance codes in Continental-European countries, due to their Anglo-Saxon orientation. For this reason, we chose a Continental-European country with an Anglo-Saxon orientated code, such as Spain, and analyse which of the recommendations proposed in the Spanish Olivencia Code have positive effects on the value of the firm. We furthermore use panel data estimation to analyse this relationship as well as the impact on firm?s value of other corporate governance related variables, such as the quality of audit reports, the magnitude of directors remuneration, the reporting on director remuneration or the firm size. Results suggest a positive relationship between the variables of execution of good corporate governance practices and the value of the company. There is also evidence that the more transparent the company is and the more favourable audit reports they obtain, the better both the managerial performance and the firm?s value. Among the recommendations, it is found that the most relevant aspects are transparency and the quality of the audit report.

Suggested Citation

  • Del Brio, Esther B. & Maia-Ramires, Elida, 2005. "Corporate Governance Mechanisms and Their Impact on Managerial Value," Working Papers "New Trends on Business Administration". Documentos de Trabajo "Nuevas Tendencias en Dirección de Empresas". 2005-09, Interuniversity Research Master and Doctorate Program (with a quality mention of ANECA) on "Business Economics", Universities of Valladolid, Burgos, Salamanca and León (Spain). Until 2008, Interuniversity Doctorate Program (with a quality mention of ANECA) “New trends in Business Administration”, Universities of Valladolid, Burgos, and Salamanca (Spain). Master en Investigación y Programa de Docto.
  • Handle: RePEc:ntd:wpaper:2005-09

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    Cited by:

    1. Björn Fasterling, 2012. "Development of Norms Through Compliance Disclosure," Journal of Business Ethics, Springer, vol. 106(1), pages 73-87, March.
    2. Haar, Brigitte, 2016. "Shareholder wealth vs. stakeholder interests? Evidence from code compliance under the German corporate governance code," SAFE Working Paper Series 154, Research Center SAFE - Sustainable Architecture for Finance in Europe, Goethe University Frankfurt.

    More about this item


    corporate governance code; compliance; director remuneration; panel data.;

    JEL classification:

    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance


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