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Corporate Governance, Industry Dynamics and Firms Performance: An Empirical Analysis of a Best Practice Model

Published online by Cambridge University Press:  17 August 2016

Jackie Krafft ,
Yiping Qu  and
Jacques-Laurent Ravix
Jackie Krafft
Affiliation:
University of Nice Sophia Antipolis, CNRS-GREDEG
Yiping Qu
Affiliation:
University of Nice Sophia Antipolis, CNRS-GREDEG
Jacques-Laurent Ravix
Affiliation:
University of Nice Sophia Antipolis, CNRS-GREDEG
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Summary

This paper intends to relate more closely corporate governance, industry dynamics and firms performance. In this perspective, it focuses on the impact of applying the normative, best practice, shareholder value model of corporate governance on industry dynamics and related performance measured by economic as well as financial indicators. At a theoretical level, the paper presents an integrated framework based on the connection between firms governance and industry dynamics issues. But the core of the paper is to advance that the combination of corporate governance and industry dynamics also requires important investigations into empirical aspects. At a case study level, our major finding is that the adoption of the best practice model of corporate governance in the telecoms equipment supplier industry contributed to create large ups and downs in the industry dynamics affecting both economic and financial performances. At a more general level, combining two different datasets Corporate governance Quotient (CGQ) and DATASTREAM, we show the variegated impact of the normative model on industry dynamics and confirm the observed phenomenon of ups and downs amplifications formerly emphasized, at least at the level of stock market performance.

Résumé

Résumé

Ce papier entend relier gouvernement d'entreprise, dynamique industrielle et performance des firmes. Dans cette perspective, nous nous focalisons sur l'impact que peut avoir l'application d'un modèle normatif de gouvernement d'entreprise par la valeur actionnariale sur la dynamique industrielle et les performances des firmes mesurées en termes économiques mais aussi financiers. Au niveau théorique, ce papier propose un cadre d'analyse intégré rassemblant les questions de gouvernement d'entreprise et de dynamique industrielle. Toutefois, le papier avance également que l'analyse combinée de ces questions requiert d'importantes investigations dans le domaine empirique. Dans une étude de cas, nous montrons que l'adoption du modèle normatif de gouvernement d'entreprise dans l'industrie des équipements spécialisés de télécommunications a contribué a créer de larges perturbations dans la dynamique industrielle affectant les performances à la fois économiques et financières des firmes.

Dans une étude économétrique, en combinant deux bases de données (Corporate Governance Quotient et Datastream), nous montrons les différences d'impact de l'application du modèle normatif de gouvernement d'entreprise sur la dynamique industrielle, et nous confirmons l'observation des amplifications à la hausse et à la baisse déjà notée, au moins au niveau de la performance sur les marchés boursiers.

Keywords

Gouvernement d'entreprisedynamique industrielleperformance des firmesmarchés boursiersindustries traditionnelles versus industries traditionnellesG30L20L60L80L90Corporate governanceindustry dynamicsfirm performancestock marketinnovative versus traditional industriesG30L20L60L80L90
Type
Research Article
Information
Recherches Économiques de Louvain/ Louvain Economic Review , Volume 74 , Issue 4 , 2008 , pp. 455 - 478
Copyright
Copyright © Université catholique de Louvain, Institut de recherches économiques et sociales 2008 

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