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What drives corporate governance? Firm-level evidence from Eastern Europe

Author

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  • Klapper, Leora F
  • Laeven, Luc
  • Love, Inessa

Abstract

The authors study differences in the use of two corporate governance provisions - cumulative voting and proxy by mail voting - in a sample of 224 firms located in four Eastern European countries. Thereport finds a significant relationship between ownership structure, and the use of corporate governance provisions. Firms with a controlling owner (owning more than 50 percent of shares) are less likely to adopt either of the two provisions. However, firms that have large, minority shareholders are more likely to adopt these provisions. The authors do not find any significant relationship between the use of these provisions, and foreign ownership. The results suggest that the decision to adopt these corporate governance provisions is influenced by large, minority shareholders in their battle for representation in the board, and in managerial decisions.

Suggested Citation

  • Klapper, Leora F & Laeven, Luc & Love, Inessa, 2005. "What drives corporate governance? Firm-level evidence from Eastern Europe," Policy Research Working Paper Series 3600, The World Bank.
    • Handle: RePEc:wbk:wbrwps:3600
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    References listed on IDEAS

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    Cited by:

    1. Grosfeld, Irena, 2009. "Large shareholders and firm value: Are high-tech firms different?," Economic Systems, Elsevier, vol. 33(3), pages 259-277, September.
    2. Tulbure, Narcis & Catarama, Delia, 2009. "Institutional and Socio-Cultural Factors Explaining the Development of Mutual Funds. A Cross-Country Analysis," MPRA Paper 20341, University Library of Munich, Germany.
    3. Irena Grosfeld, 2009. "Large shareholders and firm value: Are high-tech firms different?," PSE Working Papers halshs-00587856, HAL.
    4. René M. Stulz, 2006. "Financial Globalization, Corporate Governance and Eastern Europe," Chapters, in: Klaus Liebscher & Josef Christl & Peter Mooslechner & Doris Ritzberger-Grünwald (ed.), Financial Development, Integration and Stability, chapter 3, Edward Elgar Publishing.
    5. Nedelchev, Miroslav, 2012. "Корпоративно Управление На Финансови Посредници: Конвергенция И Дивергенция [Corporate Governance Of Financial Intermediaries: Convergence And Divergence]," MPRA Paper 52268, University Library of Munich, Germany.
    6. Irena Grosfeld, 2006. "Ownership concentration & firm performance: Evidence from an emerging market," William Davidson Institute Working Papers Series wp834, William Davidson Institute at the University of Michigan.
    7. Nedelchev, Miroslav, 2012. "Corporate governance of financial intermediaries: convergence and divergence," MPRA Paper 53939, University Library of Munich, Germany.
    8. Paul Schure & Francesco Passerelli & David Scoones, 2007. "When the Powerful Drag Their Feet," Department Discussion Papers 0703, Department of Economics, University of Victoria.
    9. Irena Grosfeld, 2006. "Ownership concentration and firm performance: Evidence from an emerging market," PSE Working Papers halshs-00590485, HAL.

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