Article (Journal/Review)
What matters and for which firms for corporate governance in emerging markets? Evidence from Brazil (and other BRIK countries)
Fecha
2012-09Registro en:
0268-1102 / 1554-0170
10.1016/j.jcorpfin.2011.10.001
000307690600017
Gorga, Erica/0000-0003-3125-1366
Gorga, Erica/E-8484-2012
Autor
Black, Bernard S.
Carvalho, Antonio Gledson de
Gorga, Érica Cristina Rocha
Institución
Resumen
A central issue in corporate governance research is the extent to which 'good' governance practices are universal (one size mostly fits all) or instead depend on country and firm characteristics. We report evidence that supports the second view. We first conduct a case study of Brazil, in which we survey Brazilian firms' governance practices at year-end 2004, construct a corporate governance index, and show that the index, as well as subindices for ownership structure, board procedure, and minority shareholder rights, predicts higher lagged Tobin's q. In contrast to other studies, greater board independence predicts lower Tobin's q. Firm characteristics also matter: governance predicts market value for nonmanufacturing (but not manufacturing) firms, small (but not large) firms, and high-growth (but not low-growth) firms. We then extend prior studies of India, Korea, and Russia, and compare those countries to Brazil, to assess which aspects of governance matter in which countries, and for which types of firms. Our 'multi-country' results suggest that country characteristics strongly influence both which aspects of governance predict firm market value, and at which firms that association is found. They support a flexible approach to governance, with ample room for firm choice. (C) 2011 Elsevier B.V. All rights reserved.