Strategy Versus Control Orientation and Firm Performance : Evidence from Europe

• Autorzy: Michael Troilo , Svetlana Orlova , Miklos Stocker , Michał Zdziarski
• Języki publikacji: EN

Abstrakty

EN

Objective: The objective of the article is to investigate the relationship between strategy and control in national-level corporate governance (CG) codes impact firm-level financial and strategic performance.
Research Design & Methods: We build on existing CG literature to offer a conceptual matrix showing the evolution of CG codes as they balance strategy and control. We relate the emphasis on strategy versus control at the national level to the firm level for both strategic outcomes as well as more traditional financial measures. Using Compustat data from 12 700 unique firms across 31 countries for the period 1990-2016, we estimate the impact of CG codes on various financial performance measures with multivariate regression and logistics (logit) models.
Findings: We find that there is a positive and significant relationship between higher emphasis on strategy in CG codes and return on assets (ROA). We also find a positive and significant relationship between the former and the probability of paying dividends, investing in research and development (R&D), and spending on capital expenditures (CAPEX).
Implications & Recommendations: Stronger legal institutions associate with a higher emphasis on strategy in CG codes. We suggest that policymakers should refine their CG Codes to focus more on strategy where feasible given our findings. We also recommend strengthening legal institutions, such as rule of law, as this will accelerate the evolution of CG codes from monitoring to strategy.
Contribution & Value Added: Our findings indicate that policymakers should refine their CG codes to emphasize strategy where feasible. In addition, strengthening legal institutions would accelerate the evolution of CG codes. (original abstract)

Słowa kluczowe

EN

Corporate governance; Strategic control; Institutions

PL

Ład korporacyjny; Kontrola strategiczna; Instytucje

• Czasopismo: Entrepreneurial Business and Economics Review
• Rocznik: 2024
• Tom: 12
• Numer: nr 1
• Strony: 153--176

Twórcy

autor

Michael Troilo

• University of Tulsa

autor

Svetlana Orlova

• University of Tulsa

autor

Miklos Stocker

• University of Budapest

autor

Michał Zdziarski

• University of Warsaw

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Identyfikatory

DOI

10.15678/EBER.2023.120109