chunk1

ABSTRACT. We explore the role of the third dimension of corporate governance which is recognized as the different financial and contractual arrangements that could affect business growth and value creation of the firm. We argue that a three-dimensional approach provides a better understanding of the dynamics of the corporate governance practices that we currently observe in listed corporations. We use data derived from two hand-collected data sets, that consist of (1) seventy venture capital backed companies that were involved in IPOs on US stock markets between 2011 and the first half of 2012, and (2) the top-forty of the world’s largest companies in the Financial Times Global 500 2012 List (including corporations from the United States, Europe and Asia) to show evidence in favor of controlling ownership structures that can maintain a tight post-IPO grip on control, but also allow firms, for strategic purposes, to resist the short-term attitude of the stock market. We use insights from the governance practices of Facebook and Google to show how shareholder value and long-term commitment are influenced by a firm’s growth and innovation prospects. pp. 69–76
JEL codes: G34; K22

Keywords: corporate governance; dual class shares; growth; disclosure; transparency; investor relations

How to cite: McCahery, Joseph A., and Erik P.M. Vermeulen (2014), “Business Growth and Firm Value Creation: The “Ignored” Third Dimension of Corporate Governance,” Journal of Self-Governance and Management Economics 2(4): 69–76.

JOSEPH A. MCCAHERY
This email address is being protected from spambots. You need JavaScript enabled to view it.
Tilburg University Law School and TILEC,
Duisenberg School of Finance, and ECGI, Netherlands
(corresponding author)
ERIK P.M. VERMEULEN
This email address is being protected from spambots. You need JavaScript enabled to view it.
Tilburg University Law School and TILEC,
Kyushu University Faculty of Law, and
Philips International B.V., Netherlands

Home | About Us | Sales | Author's Page | Journals | Abstracting & Indexing | Contributors | Books | Contact | Online Access

© 2009 Addleton Academic Publishers. All Rights Reserved.

 
Joomla templates by Joomlashine