Transfer of corporate governance practices into weak emerging market environments by foreign institutional investors
Journal Publication ResearchOnline@JCUAbstract
We advance the practice transfer theorising of corporate governance (CG) by developing a framework that uncovers how foreign institutional investors (FIIs) improve on CG practices of firms in weak institutional environments. Using hand-collected data for 85 listed Nigerian firms covering the 2011–2016 period, we show that FIIs bypass the weak regulatory environment in emerging markets by transferring good CG standards to host countries. Furthermore, FIIs’ ability to enhance the CG quality of firms in such environments is moderated by their home country's legal system, with FIIs from countries with strong legal enforcement having an enhanced ability to improve CG practices of firms in weak institutional environments. However, cultural differences between the FIIs’ home and host countries negatively moderate this relationship. Our results are robust to the choice of estimation technique and various sources of endogeneity.
Journal
International Business Review
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N/A
Volume
31
ISBN/ISSN
1873-6149
Edition
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Issue
5
Pages Count
21
Location
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Publisher
Elsevier
Publisher Url
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Publisher Location
N/A
Publish Date
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Url
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Date
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EISSN
N/A
DOI
10.1016/j.ibusrev.2022.101978