The impact of adopting shareholder primacy corporate governance on the growth of the financial market in developing countries. By
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Zingales L, ‘The Value of the Voting Right: a Study of the Milan Stock Exchange Experience’ (1994) The Review of Financial Studies 125-148 — — ‘What Determines the Value of Corporate Votes?’ (1995) 110 Quarterly Journal of Economics 1075-1110 1 The 1999 Memorandum of Understanding between the World Bank and OECD, establishing the framework for the Latin American Roundtable among a series of Regional Corporate Governance Roundtables 2 UNCTAD, ‘Guidance on good practices in corporate governance disclosure’ UNCTAD/ITE/TEB/2006/3 3 See generally Holger Spamann, ‘Empirical Comparative Law’ (2015) 11 Annual Review of Law and Social Science 131; working paper available at 4 See generally Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations (1776) Book V, Ch.1, Para 18 5 See generally Adolf Berle and Gardiner Means, The Modern Corporation and Private Property (First published 1932, Reprint edition, Transaction Publishers 1991) 6 A literature review of research articles from 1970-1990 would show that influential papers like Bernhard Grossfeld and Werner Ebke, ‘Controlling the Modern Corporation: A Comparative View of Corporate Power in the United States and Europe’ (1978) 26 (3) American Journal of Comparative Law 397-433; Jonathan Charkham, The American Corporation and the Institutional Investor: Are There Lessons from Abroad: Hands Across Sea (1988) 3 Columbia Business Law Review 765-774; Margaret Maureen Samuel, ‘International Financial Markets and Regulation of Trading of International Equities’ (1989) 19 (2) California Western International Law Journal 327-382; Vratislav Pechota, ‘Developments in Foreign and Comparative Law’ (1985) 24 (1) Columbia Journal of Transnational Law 191-230; Werner F. Ebke, ‘In Search of Alternatives: Comparative Reflections on Corporate Governance and the Independent Auditor's Responsibilities’ (1984-85) 79 (4) Northwestern University Law Review 663-720 7 Financial Reporting Council, Report of the Committee on the Financial Aspects of Corporate Governance (Cadbury Report) (1992) 8 See generally Lucian Bebchuk, ‘Efficient and Inefficient Sales of Corporate Control’ (1994) Quarterly Journal of Economics 957-994; Lucian Bebchuk and Luigi Zingales, ‘Corporate Ownership Structures: Private vs. Social Optimality’ (1995) Working Paper Series, University of Chicago; Denis Gromb, ‘Is One-share-One-vote Optimal?’ (1993) Working Paper Series, LSE; Luigi Zingales, ‘The Value of the Voting Right: a Study of the Milan Stock Exchange Experience’ (1994) The Review of Financial Studies 125-148; Luigi Zingales, ‘What Determines the Value of Corporate Votes?’ (1995) 110 Quarterly Journal of Economics 1075-1110. 9 La Porta et al., ‘Law and Finance’ (1996) NBER Working Paper 5661, 3 10 La Porta et al., ‘Legal Determinants of External Finance’ (1997) 52 (3) Journal of Finance 1131-1150; La Porta et al., ‘Law and Finance’ (1998) Journal of Political Economy 1113-1155; La Porta et al., ‘Investor Protection and Corporate Governance’ (2000) 58 J. Fin. Econ. 3 11 La Porta et al. (n 9) 5 12 ibid Table 1 13 Equals 1 if the Company Law or Commercial Code of the country requires that ordinary shares carry one vote per share, and 0 otherwise, Equivalently, this variable equals 1 when the law prohibits the existence of both multiple-voting and non-voting ordinary shares and does not allow firms to set a maximum number of votes per shareholder irrespective of the number of shares owned, and 0 otherwise. 14 Equals 1 if the company law or commercial code allows shareholders to mail their proxy vote, and 0 otherwise 15 Equals 1 if the company law or commercial code allows firms to require that shareholders deposit their shares prior to a General Shareholders Meeting thus preventing them from selling those shares for a number of days and 0 otherwise. 16 Equals 1 if the company law or commercial code allows shareholders to cast all of their votes for one candidate standing for election to the board of directors, and 0 otherwise 17 Equals 1 if the company law or commercial code grants minority shareholders either a judicial venue to challenge the management decisions or the right to step out of the company by requiring the company to purchase their shares when they object to certain fundamental changes, such as mergers, asset dispositions and changes in the articles of incorporation. The variable equals 0 otherwise. 18 It is the minimum percentage of ownership of share capital that entitles a shareholder to call for an Extraordinary Shareholders’ Meeting. It ranges from 1 to 33% 19 An index aggregating the shareholder rights which La Porta et al. labelled as “anti-director rights.” The index is formed by adding 1 when: (1) the country allows shareholders to mail their proxy votes (2) shareholders are not required to deposit their shares prior to the General Shareholders’ Meeting; (3) cumulative voting is allowed; (4) an oppressed minorities mechanism is in place; or (5) when the minimum % of share capital that entitles a shareholder to call for an Extraordinary Shareholders’ Meeting is less than or equal to 10% (the sample median). The index ranges from 0 to 5. 20 Equals the percentage of net income that the company law or commercial code requires firms to distribute as dividends among ordinary stockholders. It takes a value of 0 for countries without such restriction. 21 Equals 1 if the reorganization procedure imposes restrictions, such as creditors’ consent to file for reorganization. It equals 0 if there are no such restrictions. 22 Equals 1 if the reorganisation procedures imposes an automatic stay on the assets of the firm upon filing the organization petition, This restriction prevents secured creditors to gain possession of their security, It equal 0 if such restriction does not exist in the law
23 Equals 1 if secured creditors are ranked first in the distribution of the proceeds that result from the disposition of the assets of a bankrupt firm. Equals 0 if non-secured creditors, such as the Government and workers, are given absolute priority 24 Equals 1 if the debtor keeps the administration of its property pending the resolution of the reorganization process, and 0 otherwise. Equivalently, this variable equals 0 when an official appointed by the court or by the creditors, is responsible for the operation of the business during reorganization 25 It is the percentage of total share capital mandated by corporate law to avoid the dissolution of an existing firm. It takes a value of 0 for countries without such restriction. 26 International Country Risk’s assessment of the risk of “outright confiscation” or “forced nationalization”. International Country Risk Average of the months of April and October of the monthly index between 1982 and 1995. Scale from 0 to 10, with lower scores for higher risks 27 Index created by examining and rating companies’ 1990 annual reports on their inclusion or omission of 90 items. These items fall into 7 categories (general and Auditing Trends, information, income statements, balance sheets, funds flow statement, accounting standards, stock data and special items). A minimum of 3 companies in each country were studied. The companies represent a cross-section of various industry groups where industrial companies numbered 70% while financial companies represented the remaining 30%. 28 International Country Risk’s assessment of the “risk of a modification in a contract taking the form of a repudiation, postponement or scaling down” due to “budget cutbacks, indigenization pressure, a change in government or a change in government economic and social priorities.” Average of the months of April and October of tie monthly index between 1982 and 1995. Scale from 0 to 10, with lower scores for higher risks. 29 See La Porta et al. (n 10) 30 La Porta et al. (2000) (n 10) 10,11. Anti-director rights index - Proxy by mail, Shares not blocked before meeting, Cumulative voting/proportional representation, Oppressed minority, Pre-emptive right to new issues, % Share of capital to call and ESM ≤ 10%; Creditor rights index - No automatic stay on secured assets, Secured creditors first, Paid restrictions for going into reorganization, Management does not stay in reorganization; Enforcement - Efficiency of the judicial system, Corruption, Accounting standards 31 See generally Ulrike Malmendier, ‘Roman Law and the Law-and-Finance Debate’ Yüklə 0,78 Mb. Dostları ilə paylaş:
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