Building upon institutional theory, this study investigates whether and how market enforcement mediates the relationship between external (country-level) and internal (firm-level) corporate governance mechanisms. We focus on two countries with contrasting legal, regulatory and institutional regimes: Canada and France. Market enforcement is proxied by two measures of market efficiency: abnormal returns and price volatility. Our results suggest that external governance mechanisms interact with internal governance mechanisms via market enforcement, which differs greatly between both countries. Hence, the complementarity of internal and external governance mechanisms depends upon the nature and type of enforcement (i.e., emphasis on ex-ante monitoring and compliance vs. ex post sanctions).
A key area of research focuses on firms in transition, particularly those going public via initial public offerings, those growing via venture capital infusions, and acquirers and targets in merger and acquisition deals. In this article, we provide a review of research regarding firms in transition, with a primary focus on accounting‐related research. As part of our review we include key contributions both in the Canadian context and internationally, and discuss areas to be considered for future research.
This paper analyzes the value relevance of firms’ social and environmental disclosure (SED) patterns expected by investors considering firms’ institutional contexts. Results show that the expected SED is value relevant for Chinese firms, not value relevant for Mexican and Canadian firms, and partial value relevant for Chilean, South African, and American firms. For Chinese firms, when the expected SED is isomorphic within the country, it is positively related to market value. However, the alternative expected SED is negatively related to market value. For Chilean firms, only the isomorphic social disclosure is (positively) valued by the stock market. Whereas for South African and American firms, only the alternative social disclosure is positively related to market value. Results suggest that institutions are essential to SED valuation as they determine whether and how stock markets value SED. Researchers in the discipline of accounting has taken an interest in social and environmental activities along with the rise of environmental protection regulations.
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