David Bourget (Western Ontario)
David Chalmers (ANU, NYU)
Rafael De Clercq
Jack Alan Reynolds
Learn more about PhilPapers
International Journal of Business Governance and Ethics 2 (s 3-4):294-328 (2006)
Identifying corporate governance mechanisms to improve firm performance has been at the forefront of policy discussion and research in recent years. Existing research in this area focuses on large-capitalisation firms, and has not provided much insight on smaller firms. This paper tests for the optimality of deployment of governance mechanisms for Canadian small-cap firms by estimating a simultaneous equation system that links four control mechanisms to firm performance, using recent data. The results confirm simultaneity between several governance mechanisms and Canadian small-cap firm performance. CEO ownership and shareholder rights are shown to determine board independence. CEO ownership in turn is shown to depend on the extent of shareholder rights and whether the CEO is also Chairperson of the board. Canadian small-cap firms appear to overutilise debt as a control mechanism. There is somewhat weaker evidence that board independence and CEO ownership are beyond the optimum. The latter, given the relatively high degree of CEO ownership in Canadian small-cap firms, is consistent with management entrenchment. We also do not find any significant discount to performance for Quebec-based firms, or for firms with dual or multiple voting class shares structures.
|Keywords||No keywords specified (fix it)|
|Categories||categorize this paper)|
Setup an account with your affiliations in order to access resources via your University's proxy server
Configure custom proxy (use this if your affiliation does not provide a proxy)
|Through your library|
References found in this work BETA
No references found.
Citations of this work BETA
No citations found.
Similar books and articles
Armand Picou & Michael J. Rubach (2006). Does Good Governance Matter to Institutional Investors? Evidence From the Enactment of Corporate Governance Guidelines. Journal of Business Ethics 65 (1):55 - 67.
Viet Ha Hoang (2006). Securities Market and Corporate Governance of Privatised Firms. International Journal of Business Governance and Ethics 2 (s 3-4):254-279.
John Nowland (2008). Are East Asian Companies Benefiting From Western Board Practices? Journal of Business Ethics 79 (1/2):133 - 150.
Ran Zhang, Zabihollah Rezaee & Jigao Zhu (2010). Corporate Philanthropic Disaster Response and Ownership Type: Evidence From Chinese Firms' Response to the Sichuan Earthquake. [REVIEW] Journal of Business Ethics 91 (1):51 - 63.
Ran Zhang & Zabihollah Rezaee (2009). Do Credible Firms Perform Better in Emerging Markets? Evidence From China. Journal of Business Ethics 90 (2):221 - 237.
Laura J. Spence & José Félix Lozano (2000). Communicating About Ethics with Small Firms: Experiences From the U.K. And Spain. [REVIEW] Journal of Business Ethics 27 (1-2):43 - 53.
Kiridaran Kanagaretnam, Gerald J. Lobo & Emad Mohammad (2009). Are Stock Options Grants to Ceos of Stagnant Firms Fair and Justified? Journal of Business Ethics 90 (1):137 - 155.
Hoje Jo & Maretno A. Harjoto (2011). Corporate Governance and Firm Value: The Impact of Corporate Social Responsibility. [REVIEW] Journal of Business Ethics 103 (3):351-383.
Jeffrey S. Harrison & Joseph E. Coombs (2012). The Moderating Effects From Corporate Governance Characteristics on the Relationship Between Available Slack and Community-Based Firm Performance. Journal of Business Ethics 107 (4):409-422.
Krishna Reddy, Stuart Locke, Frank Scrimgeour & Abeyratna Gunasekarage (2008). Corporate Governance Practices of Small Cap Companies and Their Financial Performance: An Empirical Study in New Zealand. International Journal of Business Governance and Ethics 4 (1):51-78.
Added to index2009-01-28
Total downloads18 ( #132,725 of 1,696,570 )
Recent downloads (6 months)7 ( #79,846 of 1,696,570 )
How can I increase my downloads?