What drives corporate governance? Firm-level evidence from Eastern Europe

Leora F. Klapper (), Luc Laeven () and Inessa Love

No 3600, Policy Research Working Paper Series from The World Bank

Abstract: The authors study differences in the use of two corporate governance provisions - cumulative voting and proxy by mail voting - in a sample of 224 firms located in four Eastern European countries. Thereport finds a significant relationship between ownership structure, and the use of corporate governance provisions. Firms with a controlling owner (owning more than 50 percent of shares) are less likely to adopt either of the two provisions. However, firms that have large, minority shareholders are more likely to adopt these provisions. The authors do not find any significant relationship between the use of these provisions, and foreign ownership. The results suggest that the decision to adopt these corporate governance provisions is influenced by large, minority shareholders in their battle for representation in the board, and in managerial decisions.

Keywords: Microfinance; Small Scale Enterprise; Financial Crisis Management&Restructuring; National Governance; Private Participation in Infrastructure (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-fin and nep-tra
Date: 2005-05-01
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