Samanta, N. (2019) Convergence to shareholder primacy corporate-governance : evidence from a leximetric analysis of the evolution of corporate-governance regulations in 21 countries, 1995-2014. Corporate Governance, 19 (5). pp. 849-883. ISSN 1472-0701
Abstract
Purpose For the past two and half decades, there has been a marked shift in the corporate governance regulations around the world. The change is more remarkable in developing countries where countries with little or no corporate governance regime have adopted “world class” standards. While there can be a debate on whether law in books actually translates into law in action, in the meantime it might be interesting to analyse the law in books to understand how the corporate governance regime has evolved in the past 20 years. This paper quantitatively tracks 21 countries, most of them being developing and emerging economies, over a period of 20 years. The period covers 1995 to 2014; thus, it traverses the pre and post crisis period in 1999 and 2008. Thus, the paper also provides a snapshot of the macrolegal changes that the countries engage in hoping to stave off the next crisis. The paper uses over 50 parameters modelled on the OECD Principles of Corporate Governance. The paper confirms the suspicion that corporate governance norms around the developing economies are converging on shareholder primacy end of the continuum. The rate of convergence was highest just before the financial crisis of 2008 and has since then slowed down.
Design/methodology/approach The paper uses data collected from experts. They filled up detailed questionnaire which quizzed them on the rules relating to corporate governance norms in their country and asked them to retrospectively check their data every five years for the past 20 years. This provided an excellent overview as to how the law has evolved in the past two decades on corporate governance. The data were then tabulated using a scoring sheet and then was put together using item response theory (IRT) which is a Bayesian method similar to factor analysis. The paper then follows a comparative approach using heatmaps to analyse the evolution of corporate governance in developing countries.
Findings Corporate governance norms around the developing economies are converging on shareholder primacy end of the continuum. The rate of convergence was highest just before the financial crisis of 2008 and has since then slowed down.
Originality/value This is the first time that corporate governance panel data analysis has been carried out on top developing countries across so many parameters for such a long period. This paper also uses Bayesian IRT modelling to analyse the evolution which is novel in its approach especially in the corporate governance literature. The paper thus provides a clear view on the evolution of corporate governance norms and how they are converging on a particular ideology.
Metadata
Item Type: | Article |
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Authors/Creators: |
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Copyright, Publisher and Additional Information: | © 2019 Emerald Group Publishing. This is an author-produced version of a paper subsequently published in Corporate Governance. This version is distributed under the terms of the Creative Commons Attribution-NonCommercial Licence (http://creativecommons.org/licenses/by-nc/4.0/), which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited. You may not use the material for commercial purposes. |
Keywords: | Corporate governance; Comparative leximetrics; Corporate governance evolution; Bayesian inference; International business law |
Dates: |
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Institution: | The University of Sheffield |
Academic Units: | The University of Sheffield > Faculty of Social Sciences (Sheffield) > School of Law (Sheffield) |
Depositing User: | Symplectic Sheffield |
Date Deposited: | 21 Feb 2019 12:00 |
Last Modified: | 18 Nov 2021 09:16 |
Status: | Published |
Publisher: | Emerald |
Refereed: | Yes |
Identification Number: | 10.1108/CG-07-2018-0249 |
Open Archives Initiative ID (OAI ID): | oai:eprints.whiterose.ac.uk:142495 |
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