Substitutability and complementarity of corporate governance mechanisms in Latin America

Diego Cueto ()

International Review of Economics & Finance, 2013, vol. 25, issue C, 310-325

Abstract: This research analyzes the relations between highly concentrated ownership structures, corporate governance mechanisms and firm value for a sample of Latin American firms. With concentrated ownership, the conflict of interest shifts from the principal-agent problem to a dominant-minority shareholder focus. To minimize the negative effects of ownership concentration on firm value, Latin American firms resort to a number of different corporate governance mechanisms including measures for leverage, takeover activity, board size, board independence, cross-listing, single/multiple-class shares, and the dual role of the CEO as chairman of the board. In addition, institutional investors assume monitoring roles and help curtailing asset expropriation.

Keywords: Corporate governance theories; Business groups; Latin American economies; Shareholder value (search for similar items in EconPapers)
JEL-codes: G15 G32 G34 (search for similar items in EconPapers)
Date: 2013
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Citations: View citations in EconPapers (9)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:reveco:v:25:y:2013:i:c:p:310-325

DOI: 10.1016/j.iref.2012.07.008

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