Institutional complementarities and corporate governance: The case of hostile takeover attempts

Abstract

Research Question/Issue: Do institutions reinforce each other when it comes to shaping the economic and organizational environment? We investigate national institutional complementarities by examining how different types of institutions jointly influence the occurrence of hostile takeover attempts, a practice in corporate governance whose frequency differs across countries. We distinguish among regulative, normative, and cultural-cognitive institutions and examine how they interact to influence the occurrence of hostile takeover attempts worldwide.Research Findings/Insights: Using panel data on hostile takeover activity of 45 countries between 1988 and 2016, we find evidence supporting the impact of institutions individually and of institutional complementarities.Theoretical/Academic Implications: This study shows that important corporate governance practices such as hostile takeover attempts are indeed influenced by different aspects of institutional environment. It thus helps us better understand the effectiveness of corporate governance practice across different countries.Practitioner/Policy Implications: This study sheds new light on policies facilitating certain corporate governance practice such as hostile takeovers. It also provides managers with a tool to analyze the prevalence of hostile takeovers in a country.

Inheritance tax, shareholder protection, and the market value of family firms: A cross‐country analysis

“…Inheritance tax regimes operate in the sphere of the family (Carney, Gedajlovic, & Strike, 2014), whereas shareholder protection rules operate in the sphere of the firm and are shaped by different legal traditions and institutional logics (Greenwood, Díaz, Li, & Lorente, 2010). In particular, we study institutional complementarities (Abdi & Aulakh, 2012; Luiz, Stringfellow, & Jefthas, 2017; Zhou & Guillén, 2019) and we theorize that inheritance tax and shareholder protection institutional mechanisms may substitute for one another when they intersect in organizational settings such as business families.…”

Taking stock of corporate governance research and future research opportunities

“…Corporate governance research is conducted intensively all over the world, built on a broad variety of theories, and based on various methodological approaches to develop and substantiate new insights. The international scope of corporate governance research is indicated by the diverse set of governance environments studied in recent CGIR articles that include Australia, Canada, China, Germany, India, Indonesia, Iran, Italy, Japan, Korea, Russia, Spain, Sweden, Taiwan, the United Kingdom, the United States, and Vietnam, as well as multicountry studies (e.g., Deloof, Du, & Vanacker, 2020; Desender, LópezPuertas‐Lamy, Pattitoni, & Petracci, 2020; García‐Sánchez & García‐Meca, 2018; Lazzarini & Musacchio, 2018; Qian, Cao, & Cao, 2018; Tribó, 2019; Zhou & Guillén, 2019). Corporate governance research is by no means restricted to the average publicly held corporation but also deals with the unique challenges associated with specific types of firms like, for instance, audit firms (La Rosa, Caserio, & Bernini, 2019), banks (Sheedy & Griffin, 2018), business groups (Shin, Hyun, Oh, & Yang, 2018), closely held firms (Russino, Picone, & Dagnino, 2019), declining firms (Abebe & Tangpong, 2018), entrepreneurial ventures (Pérez‐Calero, Larrañeta, & Wright, 2019), family firms (Yeh & Liao, 2019), foundations (Thomsen, Poulsen, Børsting, & Kuhn, 2018), institutional investors (Semenova & Hassel, 2019), intergovernmental organizations (Federo & Saz‐Carranza, 2018), initial public offerings (IPOs) (González, Guzmán, Tellez‐Falla, & Trujillo, 2019), as well as state‐owned enterprises (Apriliyanti & Randøy, 2019).…”