Does Good Corporate Governance Lead to Stronger Productivity Growth?

Research output: Working paperDiscussion paperOther research output

400 Downloads (Pure)

Abstract

This study investigates the impact of corporate governance and product market competition on total factor productivity growth in Germany and the UK.For Germany, the prototype of a bank-based governance system, productivity grows faster in firms controlled by financial institutions (in particular, banks and insurance companies) and intense competition reinforces this beneficial impact. Furthermore, the importance of the German creditors (mostly banks) for productivity growth is particularly significant in firms which experience financial difficulties or are in financial distress.For the UK, a market-based governance system, we do not find any evidence that creditors play a disciplinary role.Still, there is strong evidence that shareholder control (by insiders, private outsiders and financial institutions) leads to substantial increases in productivity in poorly performing firms.We also find evidence that product market competition is a substitute for blockholder control in the UK.
Original languageEnglish
Place of PublicationTilburg
PublisherFinance
Number of pages41
Volume2002-89
Publication statusPublished - 2002

Publication series

NameCentER Discussion Paper
Volume2002-89

Fingerprint

Corporate governance
Productivity growth
Governance
Productivity
Germany
Product market competition
Financial institutions
Financial distress
Blockholders
Substitute
Total factor productivity growth
Prototype
Insider
Shareholders
Insurance companies
Outsider

Keywords

  • corporate governance
  • productivity

Cite this

Koeke, J., & Renneboog, L. D. R. (2002). Does Good Corporate Governance Lead to Stronger Productivity Growth? (CentER Discussion Paper; Vol. 2002-89). Tilburg: Finance.
Koeke, J. ; Renneboog, L.D.R. / Does Good Corporate Governance Lead to Stronger Productivity Growth?. Tilburg : Finance, 2002. (CentER Discussion Paper).
@techreport{fd324cf756f645a2a61e89b625fced11,
title = "Does Good Corporate Governance Lead to Stronger Productivity Growth?",
abstract = "This study investigates the impact of corporate governance and product market competition on total factor productivity growth in Germany and the UK.For Germany, the prototype of a bank-based governance system, productivity grows faster in firms controlled by financial institutions (in particular, banks and insurance companies) and intense competition reinforces this beneficial impact. Furthermore, the importance of the German creditors (mostly banks) for productivity growth is particularly significant in firms which experience financial difficulties or are in financial distress.For the UK, a market-based governance system, we do not find any evidence that creditors play a disciplinary role.Still, there is strong evidence that shareholder control (by insiders, private outsiders and financial institutions) leads to substantial increases in productivity in poorly performing firms.We also find evidence that product market competition is a substitute for blockholder control in the UK.",
keywords = "corporate governance, productivity",
author = "J. Koeke and L.D.R. Renneboog",
note = "Pagination: 41",
year = "2002",
language = "English",
volume = "2002-89",
series = "CentER Discussion Paper",
publisher = "Finance",
type = "WorkingPaper",
institution = "Finance",

}

Koeke, J & Renneboog, LDR 2002 'Does Good Corporate Governance Lead to Stronger Productivity Growth?' CentER Discussion Paper, vol. 2002-89, Finance, Tilburg.

Does Good Corporate Governance Lead to Stronger Productivity Growth? / Koeke, J.; Renneboog, L.D.R.

Tilburg : Finance, 2002. (CentER Discussion Paper; Vol. 2002-89).

Research output: Working paperDiscussion paperOther research output

TY - UNPB

T1 - Does Good Corporate Governance Lead to Stronger Productivity Growth?

AU - Koeke, J.

AU - Renneboog, L.D.R.

N1 - Pagination: 41

PY - 2002

Y1 - 2002

N2 - This study investigates the impact of corporate governance and product market competition on total factor productivity growth in Germany and the UK.For Germany, the prototype of a bank-based governance system, productivity grows faster in firms controlled by financial institutions (in particular, banks and insurance companies) and intense competition reinforces this beneficial impact. Furthermore, the importance of the German creditors (mostly banks) for productivity growth is particularly significant in firms which experience financial difficulties or are in financial distress.For the UK, a market-based governance system, we do not find any evidence that creditors play a disciplinary role.Still, there is strong evidence that shareholder control (by insiders, private outsiders and financial institutions) leads to substantial increases in productivity in poorly performing firms.We also find evidence that product market competition is a substitute for blockholder control in the UK.

AB - This study investigates the impact of corporate governance and product market competition on total factor productivity growth in Germany and the UK.For Germany, the prototype of a bank-based governance system, productivity grows faster in firms controlled by financial institutions (in particular, banks and insurance companies) and intense competition reinforces this beneficial impact. Furthermore, the importance of the German creditors (mostly banks) for productivity growth is particularly significant in firms which experience financial difficulties or are in financial distress.For the UK, a market-based governance system, we do not find any evidence that creditors play a disciplinary role.Still, there is strong evidence that shareholder control (by insiders, private outsiders and financial institutions) leads to substantial increases in productivity in poorly performing firms.We also find evidence that product market competition is a substitute for blockholder control in the UK.

KW - corporate governance

KW - productivity

M3 - Discussion paper

VL - 2002-89

T3 - CentER Discussion Paper

BT - Does Good Corporate Governance Lead to Stronger Productivity Growth?

PB - Finance

CY - Tilburg

ER -

Koeke J, Renneboog LDR. Does Good Corporate Governance Lead to Stronger Productivity Growth? Tilburg: Finance. 2002. (CentER Discussion Paper).