Does culture affect corporate governance?

Pascal Gantenbein (pascal.gantenbein@unibas.ch) and Christophe Volonté
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Pascal Gantenbein: University of Basel

Working papers from Faculty of Business and Economics - University of Basel

Abstract: The legal environment is one important determinant of corporate governance. However, within legal families, also cultural differences can explain the level of corporate governance to some extent. We analyze this relationship for the case of Switzerland. Swiss firms are mainly located in two cultural areas, the German and French speaking parts of Switzerland. Swiss federal law is equal in both regions which allows us to investigate the effect of cultural differences on corporate governance. Although we only find few differences, we observe that board composition is significantly driven by language-related factors: French-speaking directors are prevalent in Swiss French boards and German-speaking directors in Swiss German boards. More importantly, however, boards of these two parts of Switzerland are more likely to be structured as in their respective neighboring countries. Furthermore, in the French part, transfer restrictions of shares are more common.

Keywords: Corporate governance; culture; law; board of directors; ownership structure (search for similar items in EconPapers)
JEL-codes: G30 G32 G34 G38 Z10 (search for similar items in EconPapers)
Date: 2012-01-11
New Economics Papers: this item is included in nep-bec, nep-cul, nep-hme and nep-hrm
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Persistent link: https://EconPapers.repec.org/RePEc:bsl:wpaper:2012/04

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