Governance and Performance Revisited

In P. U. Ali and G. Gregouriu (eds), International Corporate Governance after Sarbanes-Oxley, Wiley, 2006

30 Pages Posted: 30 Apr 2013

See all articles by Øyvind Bøhren

Øyvind Bøhren

BI Norwegian Business School; European Corporate Governance Institute (ECGI)

Bernt Arne Ødegaard

University of Stavanger

Multiple version iconThere are 2 versions of this paper

Date Written: July 15, 2005

Abstract

Using rich and accurate data from Oslo Stock Exchange firms, we find that corporate governance matters for economic performance, insider ownership matters the most, outside ownership concentration destroys market value, direct ownership seems superior to indirect, and that performance decreases with increasing board size, leverage, dividend payout, and the fraction of non–voting shares. These results persist across a wide range of single–equation models, suggesting that governance mechanisms are independent and may be analyzed one by one rather than a bundle. Our findings depend on the performance measure used and on the choice of instruments in simultaneous equations. The lack of significant relationships in tests allowing for endogeneity may not reflect optimal governance, but rather an underdeveloped theory of how governance and performance interact.

Keywords: Corporate Governance, Economic Performance, Simultaneous Equations

JEL Classification: G3, L22

Suggested Citation

Bøhren, Øyvind and Ødegaard, Bernt Arne, Governance and Performance Revisited (July 15, 2005). In P. U. Ali and G. Gregouriu (eds), International Corporate Governance after Sarbanes-Oxley, Wiley, 2006 , Available at SSRN: https://ssrn.com/abstract=2257768

Øyvind Bøhren (Contact Author)

BI Norwegian Business School ( email )

Nydalsveien 37
Oslo, 0442
Norway
46410503 (Phone)

European Corporate Governance Institute (ECGI) ( email )

c/o the Royal Academies of Belgium
Rue Ducale 1 Hertogsstraat
1000 Brussels
Belgium

Bernt Arne Ødegaard

University of Stavanger ( email )

UiS Business School
Stavanger, NO-4036
Norway

HOME PAGE: http://ba-odegaard.no

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