TY - JOUR
T1 - National culture and the value implication of corporate governance
AU - Griffin, Dale
AU - Guedhami, Omrane
AU - Li, Kai
AU - Kwok, Chuck C.Y.
AU - Shao, Liang
N1 - Funding Information:
Liao, Ernst Maug, Ajay Patel, Jiaping Qiu, Ghon Rhee, Sergei Sarkissian, Jordan Siegel, John Wei, Ting Xu, Shan Zhao, seminar participants at the BI Norwegian Business School, Cass Business School, École Polytechnique Fédérale de Lausanne, Laval University, LSE, University of Lausanne, University of Verona, University of Rome III, and University of Zurich, and conference participants at the Northern Finance Association Meetings (Niagara Falls), the FMA Asian Conference (Tokyo), the FMA European Conference (Maastricht), the China–Europe Conference on Transparency, Economic Institutions and Governance (Rotterdam), the Third Symposium on Emerging Financial Markets (Beijing), the 9th International Conference on Asia-Pacific Financial Markets (Seoul), the Citrus Finance Conference (Riverside), the China International Conference in Finance (Shenzhen), the American Economic Association Meetings (San Francisco), and the JLFA Conference (Hong Kong) for their helpful comments. We are grateful to Tom White (GMI Ratings) for providing the data, and Ting Xu and Guangli Lu for excellent research assistance. Griffin and Li acknowledge financial support from the Social Sciences and Humanities Research Council of Canada and the UBC-Sauder Research Award in the Economics of Pension Plans. We are responsible for all errors.
PY - 2018
Y1 - 2018
N2 - We examine why corporate governance varies widely across countries and across firms, and why such variation matters. Using a proprietary database from Governance Metrics International on corporate governance practices across a large number of countries and firms for 2006–2011 and employing a hierarchical linear model specification, we find that the national cultural dimension of individualism is positively associated, whereas the national cultural dimension of uncertainty avoidance is negatively associated, with firm-level corporate governance scores. Within countries, there is a positive association between firm-level corporate governance scores and firm value; however, across countries, the association is negative or zero.
AB - We examine why corporate governance varies widely across countries and across firms, and why such variation matters. Using a proprietary database from Governance Metrics International on corporate governance practices across a large number of countries and firms for 2006–2011 and employing a hierarchical linear model specification, we find that the national cultural dimension of individualism is positively associated, whereas the national cultural dimension of uncertainty avoidance is negatively associated, with firm-level corporate governance scores. Within countries, there is a positive association between firm-level corporate governance scores and firm value; however, across countries, the association is negative or zero.
KW - Corporate governance
KW - Firm value
KW - Hierarchical linear model
KW - Individualism
KW - National culture
KW - Uncertainty avoidance
UR - http://www.scopus.com/inward/record.url?scp=85066917825&partnerID=8YFLogxK
U2 - 10.1561/108.00000028
DO - 10.1561/108.00000028
M3 - Review article
AN - SCOPUS:85066917825
SN - 2380-5005
VL - 3
SP - 333
EP - 372
JO - Journal of Law, Finance, and Accounting
JF - Journal of Law, Finance, and Accounting
IS - 2
ER -