Quotation Gugler, Klaus, Mueller, Dennis C., Yurtoglu, B. Burcin. 2004. Corporate Governance and the Returns on Investment. Journal of Law and Economics XLVII 589-633.


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Abstract

We analyze the impact of corporate governance institutions and ownership structures on company returns on investment by using a sample of more than 19,000 companies from 61 countries across the world. We show that the origin of a countries legal system proves to be the most important determinant of investment performance. Companies in countries with a legal system of English origin earn returns on investment that are at least as large as their costs of capital. Companies in all countries with civil-law systems earn on average returns on investment below their costs of capital. Furthermore, differences in investment performance that are related to a countries legal system dominate differences that are related to ownership structure. We also present considerable evidence that managerial entrenchment worsens a companies investment performance.

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Publication's profile

Status of publication Published
Affiliation WU
Type of publication Journal article
Journal Journal of Law & Economics
Citation Index SSCI
WU Journalrating 2009 A
WU-Journal-Rating new FIN-A, STRAT-B, VW-B, WH-B
Language English
Title Corporate Governance and the Returns on Investment
Volume XLVII
Year 2004
Page from 589
Page to 633

Associations

People
Gugler, Klaus (Details)
External
Mueller, Dennis C. (Universit├Ąt Wien, Austria)
Yurtoglu, B. Burcin (Universit├Ąt Wien, Austria)
Organization
Research Institute for Regulatory Economics FI (Details)
Institute for Quantitative Economics IN (Details)
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