Transplantation of Anglo-American corporate governance and its impact on financial market growth: a comparative analysis of nineteen developing countries 1995-2014

Abstract

Purpose Since the late 1990s, developing countries have been encouraged by international financial organisations to adopt a shareholder primacy corporate governance model. It was anticipated that in an increasingly globalised financial market, countries which introduced corporate governance practices that favour investors would gain a comparative advantage and attract more capital leading to financial market growth. This paper aims to empirically test this hypothesis. Design/methodology/approach The present research paper quantitatively investigates whether adopting shareholder primacy corporate governance norms has had any impact on the growth of the financial market, focusing on nineteen developing countries between 1995 and 2014. Time series indices are prepared for corporate governance regulations, financial market development along with three control indices. Then a lagged multilevel regression between these indices is used to investigate the strength of causality between the adoption of pro-shareholder corporate governance and the growth of the financial market. Findings The research paper finds that shifting towards a shareholder primacy model in corporate governance has a very small effect on growth of financial market in developing countries. Overall the financial, economic and technological controls have much more impact on the growth of financial markets. Originality/value This paper conclusively ends the discussion as to whether change in corporate governance has any impact on financial market growth of a country. The papers uses Bayesian econometric model. The paper thus signals the end of LLSV led question as to whether law can affect finance.

Corporate governance and financial distress: Asian emerging market perspective

“…Similarly, the association between corporate governance attributes and financial distress varies from country to country. As an Asian emerging market, corporate governance mechanism in Pakistan has featured with unique institutional background, concentrated ownership, family controlled firms and Anglo-governance model create a different environment business than the business environment of development countries (Samanta, 2019). Conversely, limited studies are available on the association between corporate governance and firm financial distress in the context of Asian markets, specifically in Pakistani context.…”

Multi-Time Scale Spillover Effect of International Oil Price Fluctuation on China’s Stock Markets

“…They found that changes in crude oil price had negative impacts on the stock markets of petroleum-importer countries but had positive impacts on petroleum-export countries [17]. By using the generalized autoregressive conditional heteroscedasticity (GARCH) model, the Granger causality test, and a vector autoregression model, follow-up studies confirmed that oil price fluctuation had an evident spillover effect on the stock markets in developed countries and emerging economic entities [11,[18][19][20].…”

Corporate Governance dan Kesulitan Keuangan: Perspektif di Indonesia.

“…Selain itu, mekanisme tata kelola perusahaan, sistem hukum dan persyaratan pengungkapan keuangan berbeda dan bervariasi di pasar negara berkembang jika dibandingkan dengan Negara maju. Demikian pula dengan keterkaitan antara atribut tata kelola perusahaan dan kesulitan keuangan bervariasi dari satu negara ke negara lain (Samanta, 2019;Younas et al, 2021). Oleh karena itu, paper ini akan mengungkapkan bukti empiris mengenai pengaruh corporate governance atau tata kelola perusahaan terhadap kesulitan keuangan.…”