Corporate Governance and Private Control Benefits: Does Corporate Governance Matter More when Private Benefits are High?
Speaker
Abstract
| This paper uses a sample of 987 firms from 14 E.U. countries to investigate the relation among corporate governance practices, private control benefits, and valuation. We find that companies where insiders have many private control benefits have lower corporate governance ratings. Using valuation regressions that take into account potential endogeneity between corporate governance, private benefits, and firm value, we find a stronger valuation effect of corporate governance in companies where insiders are able to expropriate a lot. Overall, our results suggest that there are costs associated with better corporate governance and that better corporate governance is associated with higher valuations, particularly for firms with many private benefits. |
| Contact information: |
| Paolo Perego |
