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Corporate governance compliance of family and non-family listed firms in emerging markets: Evidence from Latin America

Guadalupe del Carmen Briano-Turrent and Jannine Poletti-Hughes

Journal of Family Business Strategy, 2017, vol. 8, issue 4, 237-247

Abstract: Based on agency theory, this study analyzes whether family firms are more compliant with corporate governance recommendations than non-family firms in the context of emerging markets. Using a unique sample of 826 observations of the highest ranked companies on the stock exchange indices of Argentina, Brazil, Chile and Mexico during the period 2004–2010, we hypothesize that family firms may adopt better corporate governance practices to substitute for the absence or inefficiency of a regulatory system and to mitigate the agency problem between majority and minority shareholders. Additionally, we propose a corporate governance compliance index considering the legal and institutional framework of the region. The empirical results indicate that family firms report a higher corporate governance index. We find that board composition (independence, size and COB-CEO duality) does not moderate corporate governance compliance of family firms but rather such variables have a direct effect on the corporate governance index.

Keywords: Family firms; Corporate governance; Board composition; Agency theory; Latin America (search for similar items in EconPapers)
Date: 2017
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Handle: RePEc:eee:fambus:v:8:y:2017:i:4:p:237-247