Skip to Main Content
HBS Home
  • About
  • Academic Programs
  • Alumni
  • Faculty & Research
  • Baker Library
  • Giving
  • Harvard Business Review
  • Initiatives
  • News
  • Recruit
  • Map / Directions
Working Knowledge
Business Research for Business Leaders
  • Browse All Articles
  • Popular Articles
  • Cold Call Podcast
  • Managing the Future of Work Podcast
  • About Us
  • Book
  • Leadership
  • Marketing
  • Finance
  • Management
  • Entrepreneurship
  • All Topics...
  • Topics
    • COVID-19
    • Entrepreneurship
    • Finance
    • Gender
    • Globalization
    • Leadership
    • Management
    • Negotiation
    • Social Enterprise
    • Strategy
  • Sections
    • Book
    • Podcasts
    • HBS Case
    • In Practice
    • Lessons from the Classroom
    • Op-Ed
    • Research & Ideas
    • Research Event
    • Sharpening Your Skills
    • What Do You Think?
    • Working Paper Summaries
  • Browse All
    Which Does More to Determine the Quality of Corporate Governance in Emerging Economies, Firms or Countries?
    07 Feb 2013Working Paper Summaries

    Which Does More to Determine the Quality of Corporate Governance in Emerging Economies, Firms or Countries?

    by Andrea Hugill and Jordan Siegel
    Governance scholars debate the relative importance of country characteristics and firm characteristics in understanding variations in corporate governance practices of firms in emerging economies. One of the main questions is whether weak or incomplete public institutions dictate the governance quality of firms located in these countries. Results of analysis in this paper provide evidence that many emerging economy firms distinguished themselves above and beyond their home country peers in corporate governance ratings during the last decade. This rise was due primarily to firm-level characteristics. The fact that firm characteristics, and especially fixed effects, played a substantially greater role in emerging economies suggests that there is something happening inside these firms that allowed them to differentiate themselves from their home institutions and peer firms. These findings are important for both investors and firms in emerging economies. Investors will be able to observe corporate governance variance within countries and identify valuable investment opportunities. Also, firms should enjoy a sense of agency in their prospects for growth, unhampered by an environment with weak and incomplete governance institutions or low financial market development. Key concepts include:
    • Firm-level variables play an important role in explaining corporate governance ratings in emerging economies.
    • Firm effects in emerging economies are as important, and often more important, than country effects are in explaining ratings variance.
    • Firms in emerging economies during the last decade had the ability to move separately from their home country peer firms in their corporate governance ratings.
    • Overall, firms in emerging economies have the capability to rise above home country institutions that may be lacking or to distinguish themselves from their peer firms to both improve corporate governance ratings, and hopefully attract greater levels of capital and grow.
    LinkedIn
    Email

    Author Abstract

    Scholars of corporate governance have debated the relative importance of country characteristics and firm characteristics in understanding variations in the corporate governance practices of firms in emerging economies. Using panel data and a number of model specifications we shed new light on this debate. We find that firm characteristics are as important as and often meaningfully more important than country characteristics in explaining governance ratings variance. Our findings show that firms in emerging economies over recent years had more capability to rise above home-country peer firms in corporate governance ratings than has been previously suggested.

    Paper Information

    • Full Working Paper Text
    • Working Paper Publication Date: December 2012
    • HBS Working Paper Number: 13-055
    • Faculty Unit(s): Strategy
      Trending
        • 28 Mar 2023
        • Research & Ideas

        The FDA’s Speedy Drug Approvals Are Safe: A Win-Win for Patients and Pharma Innovation

        • 25 Jan 2022
        • Research & Ideas

        More Proof That Money Can Buy Happiness (or a Life with Less Stress)

        • 23 Mar 2023
        • Research & Ideas

        As Climate Fears Mount, More Investors Turn to 'ESG' Funds Despite Few Rules

        • 01 Mar 2023
        • What Do You Think?

        How Much Does 'Deep Purpose' Matter to the Bottom Line?

        • 25 Feb 2019
        • Research & Ideas

        How Gender Stereotypes Kill a Woman’s Self-Confidence

    Find Related Articles
    • Governance

    Sign up for our weekly newsletter

    Interested in improving your business? Learn about fresh research and ideas from Harvard Business School faculty.
    This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.
    ǁ
    Campus Map
    Harvard Business School Working Knowledge
    Baker Library | Bloomberg Center
    Soldiers Field
    Boston, MA 02163
    Email: Editor-in-Chief
    →Map & Directions
    →More Contact Information
    • Make a Gift
    • Site Map
    • Jobs
    • Harvard University
    • Trademarks
    • Policies
    • Accessibility
    • Digital Accessibility
    Copyright © President & Fellows of Harvard College