Corporate Governance in Emerging Markets : Why It Matters to Investors—and What They Can Do About It
What should investors do when scholarly research on corporate governance in emerging markets does not provide conclusive evidence on which aspects of governance matter most across all the emerging markets and how they affect firm performance? A res...
| Main Authors: | , |
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| Language: | English |
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World Bank, Washington, DC
2012
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| Online Access: | http://documents.worldbank.org/curated/en/2011/01/15107565/corporate-governance-emerging-markets-matters-investors-can http://hdl.handle.net/10986/11071 |
| Summary: | What should investors do when scholarly
research on corporate governance in emerging markets does
not provide conclusive evidence on which aspects of
governance matter most across all the emerging markets and
how they affect firm performance? A researcher and a
practitioner team up to offer guidelines and recommendations
that focus on board independence and business group
affiliation. Every day, institutional investors in emerging
markets must make practical decisions on the basis of
incomplete and at times conflicting information. So, it is
critically important that they make the best use of this
imperfect knowledge. Moreover, investors too often enter
emerging markets with misguided perceptions of the
underlying realities. And worse, they may cling to a
conceptual framework of governance that does not allow them
even to consider the searching questions they should be
asking. This Private Sector Opinion, by the authors,
explicitly highlights this problem. The authors identify a
serious gap in research on emerging markets between
high-level cross-country studies, with their inconclusive
findings on good governance indicators at the macro level,
and the separate effort to establish firm-level or
country-specific governance metrics, typically based on what
works 'in the West.' Unfortunately, less than one
percent of the research papers available on corporate
governance focus on emerging markets. |
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