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Diffusion of regulatory innovations: the case of corporate governance codes

Gerner-Beuerle, Carsten (2017) Diffusion of regulatory innovations: the case of corporate governance codes. Journal of Institutional Economics, 13 (2). pp. 271-303. ISSN 1744-1374

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Identification Number: 10.1017/S1744137416000412


Since the 1990s, most European countries have adopted detailed corporate governance codes regulating listed companies. Even though the initial codes were designed against the backdrop of a particular jurisdiction, best practice standards have become remarkably similar across legal traditions. This raises the question whether the codes are sufficiently responsive to local conditions, or standard setters are mainly motivated by the concern not to fall behind internationally accepted benchmark standards. The article quantifies central corporate governance provisions and maps their international diffusion. Controlling for differences in legal families and ownership structure, the article shows that the diffusion of best practice standards leads to a statistically significant increase in the likelihood that a foreign standard setter will adopt a broadly similar provision. The findings indicate that codes are often seen as signalling devices, irrespective of whether or not the adopted standards are well aligned with the domestic economic and legal environment.

Item Type: Article
Official URL:
Additional Information: © 2016 Millennium Economics Ltd
Divisions: Law
Subjects: K Law > KD England and Wales
Date Deposited: 27 Oct 2016 16:40
Last Modified: 20 Sep 2021 03:03

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