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Corporate Governance Best Paper Competition (2008)

Europe has a broad range of corporate governance institutions that vary within and across countries, providing an ideal setting for comparative research. The aim of this competition was to encourage researchers to take advantage of this opportunity and to stimulate the production and publication of outstanding articles in the field of corporate governance.

The competition was organised by the ECGI, the Review of Finance and the Swedish Centre for Business and Policy Studies (SNS), and was sponsored by the European Corporate Governance Training Network, the Saïd Business School (SBS) and the Jan Wallander and Tom Hedelius Research Foundation.

Competition winners announced

The winners of the 2008 ECGI Best Paper Competition were announced at a ceremony in Stockholm on 9 December 2008. Two papers reached the Competition Final.

In the opinion of the Competition Jury, the 2008 prize should be shared between them both.

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The first joint-winning paper was Bankers on the Boards of German Firms: What they do, what they are worth, and why they are (still) there by Ingolf Dittmann, Erasmus University Rotterdam, Ernst Maug, University of Mannheim and ECGI, and Christoph Schneider, University of Mannheim.

The picture shows (l to r) Ingolf Dittmann, Paolo Volpin and Christoph Schneider having received their prize certificates at the Stockholm final.

Summing up the jury's verdict of this joint-winning paper, Professor Josef Zechner said: "A company’s supervisory board is one of the central components of its governance structure. It has a delicate mix of responsibilities, including supervisory responsibilities, but also providing advice, information and possibly facilitating access to product- and capital markets. Given their expertise, bankers may be particularly well qualified to provide these functions. This paper provides unique evidence on the role of bankers on the boards of German non-financial companies. The authors do not find convincing evidence that bankers use board seats to monitor their equity interests or their interests as lenders, or to provide better access to capital markets. However, the paper shows that banks that are represented on a firm’s board promote their investment banking services and increase their lending to firms in the same industry. They also find evidence that the presence of bankers on the board causes a decline in the valuations of non-financial firms. Thus, board representation in non-financial firms seems to be in the interest of banks, but not in the interest of the non-bank shareholders in these firms."

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The other joint winning-paper was Corporate Governance Externalities by Viral Acharya, London Business School and CEPR and Paolo Volpin, London Business School and CEPR.

The picture shows (l to r) three members of the Competition Jury who attended the Competition final in Stockholm, Professor Josef Zechner, Professor Franklin Allen and Professor Marco Becht. Photo: Allan Seppa, SNS

Summing up the jury's verdict of this joint-winning paper, Professor Josef Zechner said: "Since companies can choose and commit to their own governance arrangements, many scholars and practitioners question the role for regulatory standards. This paper demonstrates that even if firms can commit to governance standards, they may choose inefficiently low levels of governance because they do not internalise the full benefit of their own choice of governance. Thus the paper provides a rational for regulatory corporate governance standards. The source of the externality is the managerial labour market. Firms with weaker governance must offer managers more generous compensation packages to incentivise them. This in turn forces firms with good governance to also pay their management more than they would otherwise. This externality implies that, in the absence of regulation, firms would “underinvest” in governance. This externality view of corporate governance has interesting and important implications for regulatory standards, ownership structure of firms, and the market for corporate control."

Competition organisers and sponsor

The competition was organised by ECGI, the Review of Finance and the Swedish Centre for Business and Policy Studies (SNS), and it was sponsored by the European Corporate Governance Training Network (ECGTN), Saïd Business School (SBS) and the Jan Wallander and Tom Hedelius Research Foundation.

European Corporate Governance Institute (ECGI)

The European Corporate Governance Institute (ECGI) was founded in 2002.  It has been established to improve corporate governance through fostering independent scientific research and related activities.  The ECGI produces high quality independent scientific research while remaining close to the concerns and interests of corporate, financial and public policy makers.  It draws on the expertise of scholars from numerous countries and brings together a critical mass of expertise and interest to bear on this important subject.

European Corporate Governance Training Network (ECGTN)

The European Corporate Governance Training Network (ECGTN) had the aim to reduce the European research and training gap in corporate governance by bringing together Europe's leading academics and institutions from law, economics, finance, political economy and management to train doctoral students in conducting world class research in this area. The ECGTN project was funded by the European Commission under the Marie Curie Research Actions. Its duration was 48 months, starting in June 2004.

Swedish Centre for Business and Policy Studies (SNS)

SNS was an independent network of leading decision makers from the private and public sectors who share a commitment to social and economic development in Sweden.

Its aim was to improve the basis for rational decisions on major social and economic issues, by promoting social science research and stimulating public debate.

Review of Finance (RoF)

The Review of Finance is a peer-reviewed journal that competes for the best articles in the field of finance and aims at a wide circulation and visibility in the profession. The journal’s editorial policy is guided by two criteria: quality and innovation. The board welcomes submissions of high-quality papers in all areas of financial economics: established areas such as asset pricing, corporate finance, banking and market microstructure, but also newly developing fields such as law and finance, behavioral finance and experimental finance.

Being the journal of the European Finance Association, the Review of Finance enjoys the solid support of the Association’s members. At the same time, it aims to be a resource for the world community of finance researchers, open to exciting and novel contributions from authors around the globe. From time to time, the journal publishes special issues on timely topics.

The board is committed to a fast, electronically managed, editorial process. In particular, its “fast-track review” process ensures an editorial decision in 2 weeks.

The Saïd Business School (SBS)

Established in 1996, Oxford University’s Saïd Business School is Europe’s fastest-growing business school, with a reputation for innovative business education. The School combines the highest standards of academic rigour with a practical understanding of business and wealth creation. SBS faculty is engaged in boundary-extending research on key management issues, in dialogue with the wider intellectual community and with practitioners.

Jan Wallander and Tom Hedelius Research Foundation

The Foundation's purpose is the advancement of social science research mainly in economic history, economic geography, management science, economics and econometrics.

It has a particular interest in supporting research concerning corporations, organisations, public administration and economic policy of importance for practical applications. There is a priority on supporting national and international research collaboration. Annual grants amount to a total of SEK 90m (€10m) corresponding to 300 full-time research working years.


Prize award

The winning paper has been awarded a prize of €10,000. 

How the competition works

  • Stage 1: A Scientific Committee comprising the Competition Jury augmented by other academics appointed once submissions have closed (15 February 2008), screens written submissions.  The Committee invites twelve papers to be presented at a conference in Oxford in June 2008. 
  • Stage 2: The Scientific Committee selects eight papers from those presented at the Oxford conference on 10-11 June 2008 to be invited for submission to the Review of Finance fast-track refereeing process, free of charge.
  • Stage 3: Up to four refereed papers are invited for presentation to the final round in Stockholm. At this stage, papers commit to publication in the Review of Finance. One author per paper from these finalists receives tickets to attend the 2008 Nobel Prize Award in December 2008.
  • Stage 4: The Competition Jury chooses and announces the winner in Stockholm.

Definition of Europe in relation to research

Empirical papers must draw on cases/data from at least one Member State of the European Union, the New Member States of the Union, applicant countries, or another European country. Theoretical papers are excluded if they refer to situations that are irrelevant in the European context.

Eligibility of researchers

The competition was open to any researcher, whether working in Europe or elsewhere. Board members and employees of the ECGI and the SNS and editors of the Review of Finance could not participate in the competition, nor may any member of the Competition Jury.


Franklin Allen

Professor of Finance and Economics
Imperial College Business School, Brevan Howard Centre
Fellow, Research Member

Marco Pagano

Professor of Economics, Facoltà di Economia
Università di Napoli Federico II
Fellow, Research Member

Marco Becht

Professor of Finance and the Goldschmidt Professor of Corporate Governance
Solvay Brussels School for Economics and Management, Université libre de Bruxelles
Fellow, Research Member

René Stulz

Everett D. Reese Chair of Banking and Monetary Economics
The Ohio State University
Fellow, Research Member

Colin Mayer

Emeritus Professor of Management Studies
Blavatnik School of Government and Saïd Business School, University of Oxford
Fellow, Research Member

Josef Zechner

Chair of Banking and Finance
Department of Business Administration, University of Vienna
Research Member
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