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. (Universität Wien, Austria)
Yurtoglu, B. Burcin (Universität Wien, Austria)
Organization
Research Institute for Regulatory Economics FI (Details)
Department of Economics (Gugler) (Details)
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