Suchergebnisse

The authors analyze the impact of corporate governance institutions, ownership structures and external capital market constraints on company returns on investment by using a sample of more than 19,000 companies from 61 countries across the world. They show that (1) of these three sets of institutions, the origin of a country's legal system proves to be the most important. Companies in countries with English-origin legal systems earn returns on investment that are at least as large as the cost of capital. (2) Differences in investment performance related to a country's legal system dominate differences related to ownership structure. (3) Strong external capital markets improve the investment performance of companies." (author's abstract)

We conceptualize capital markets in terms of resource access and governance, and argue that more developed capital markets facilitate firm restructuring through more effective provision of capital and governance of transactions. We then develop a contingency model that specifies that the effects of capital market development on restructuring vary by (1) types of restructuring, (2) the nature of the economic environments, and (3) firms' access to resources. We evaluate a broad range of restructuring actions among independent firms and business group affiliates in Singapore and South Korea before and during the economic shock of 1998–1999. Results support our predictions of the impact of capital market development and of contingencies, and highlight the value of incorporating an external capital markets perspective to complement internally focused theoretical explanations for firm restructuring.