National Culture and the Value Implication of Corporate Governance

Dale Griffin, Omrane Guedhami, Kai Li (), Chuck C.Y. Kwok and Liang Shao

Journal of Law, Finance, and Accounting, 2018, vol. 3, issue 2, 333-372

Abstract: We examine why corporate governance varies widely across countries and across firms, and why such variation matters. Using a proprietary database from Governance Metrics International on corporate governance practices across a large number of countries and firms for 2006–2011 and employing a hierarchical linear model specification, we find that the national cultural dimension of individualism is positively associated, whereas the national cultural dimension of uncertainty avoidance is negatively associated, with firm-level corporate governance scores. Within countries, there is a positive association between firm-level corporate governance scores and firm value; however, across countries, the association is negative or zero.

Date: 2018
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Persistent link: https://EconPapers.repec.org/RePEc:now:jnllfa:108.00000028

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