Corporate governance across institutional contexts

This dissertation consists of three essays that investigate the important issues involved with corporate governance across different institutional contexts. Chapter 2 and Chapter 4 bring together agency theory and institutional perspective and examine how various institutions affect companies' governance and how institutions affect firm value. Chapter 3 compares institutional development and the effect on firm governance choice from a transaction cost economics perspective. These studies contribute to the research in corporate strategy by identifying the appropriate contingencies for multiple theoretical perspectives in corporate strategy and linking institutions with firm strategy and firm value through combination of multiple theoretical perspectives.;All three essays are multi-country and multi-industry studies. Chapter 2 draws on 884 publicly listed firms with concentrated ownership in seven Asian countries and examines the effect of corporate governance on firm value during the 1997 Asian financial crisis. The results of the multivariate analysis show that higher ownership concentration tends to be associated with higher firm value, and can be partially substituted by country institutional development. The effect of the largest shareholder's excess control on firm value is conditioned on country-level institutional development. Finally, higher firm value is associated with more control by nondominant blockholders.;Chapter 3 recognizes different governance modes in the private participation projects in emerging economies and conceptualizes them as modes of transactions between the state and the private entity. Using data on 2550 private participation projects in the infrastructure industries in 94 emerging economies, we find that firms self-select private participation modes. The survival differences across modes of private participation arise as a function of transaction uncertainty embedded in the institutional environment. Private entities in countries with more uncertainty tend to choose internal or hybrid modes as opposed to market governance form. The results also show that projects that face more uncertainty and choose to adopt market governance are less likely to survive. However, this relationship is not found among privatized projects that adopt internal or hybrid governance. This indicates that firms may control the environmental uncertainty through internal arrangements.;Chapter 4 examines foreign firms issuing initial public offering (IPO) in the U.S. and answers the following questions: Is there a valuation difference between U.S. domestic IPOs and international IPOs? How do foreign IPOs compensate for information asymmetry and risk in the U.S.? How is valuation of foreign IPOs related to firm characteristics, industry, and home country effect? From 205 pairs of matched foreign and U.S. companies that issued IPOs in the U.S. from 1992 to 2005, U.S. companies have had more managerial ownership reduction than foreign companies during IPO. Additionally, foreign companies more culturally distant from the U.S. show more managerial ownership reduction during IPO. Managerial ownership change, home country political risk and industry risk are signals to investors to evaluate IPOs.