Corporate Governance, Industry Dynamics and Firms Performance: An Empirical Analysis of a Best Practice Model

Jackie Krafft, Yiping Qu and Jacques-Laurent Ravix ()

Recherches économiques de Louvain, 2008, vol. 74, issue 4, 455-478

Abstract: This paper intends to relate more closely corporate governance, industry dynamics and firms performance. In this perspective, it focuses on the impact of applying the normative, best practice, shareholder value model of corporate governance on industry dynamics and related performance measured by economic as well as financial indicators. At a theoretical level, the paper presents an integrated framework based on the connection between firms governance and industry dynamics issues. But the core of the paper is to advance that the combination of corporate governance and industry dynamics also requires important investigations into empirical aspects. At a case study level, our major finding is that the adoption of the best practice model of corporate governance in the telecoms equipment supplier industry contributed to create large ups and downs in the industry dynamics affecting both economic and financial performances. At a more general level, combining two different datasets Corporate governance Quotient (CGQ) and DATASTREAM, we show the variegated impact of the normative model on industry dynamics and confirm the observed phenomenon of ups and downs amplifications formerly emphasized, at least at the level of stock market performance. JEL Codes ? G30, L20, L60, L80, L90.

Keywords: corporate governance; industry dynamics; firm performance; stock market; innovative versus traditional industries (search for similar items in EconPapers)
JEL-codes: G30 L20 L60 L80 L90 (search for similar items in EconPapers)
Date: 2008
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Citations: View citations in EconPapers (5)

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Working Paper: Corporate Governance, Industry Dynamics and Firm Perfomance: an Empirical Analysis of a Best Practice Model (2008)
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