Which Aspects of Corporate Governance Do and Do Not Matter in Emerging Markets

Which Aspects of Corporate Governance Do and Do Not Matter in Emerging Markets

Bernard Black, Antonio Gledson de Carvalho, Vikramaditya Khanna, Woochan Kim, Burcin Yurtoglu

Series number :

Serial Number: 

Date posted :

August 27 2018

Last revised :

November 17 2019
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  • Brazil • 
  • Korea • 
  • India • 
  • Turkey • 
  • Corporate governance • 
  • boards of directors • 
  • Disclosure • 
  • shareholder rights

Well-constructed, country-specific “corporate governance indices” can predict higher firm values in emerging markets. However, there is little credible research on which aspects of governance drive that overall relationship. We study that question across four major emerging markets (Brazil, India, Korea, and Turkey).

We build overall country-specific governance indices, comprised of indices for disclosure, board structure, ownership structure, shareholder rights, board procedure, and control of related party transactions. Disclosure (especially financial disclosure) predicts higher market value across all four countries. Board structure (principally board independence) has a positive coefficient in all countries and is significant in two countries. The other indices do not predict firm value. These results suggest that regulators and investors, in assessing governance, and firm managers, in responding to investor pressure for better governance, would do well to focus on disclosure and board structure.


Fellow, Research Member
Northwestern University Law School and Kellogg School of Management Law School
Real name:
Antonio Gledson de Carvalho
Real name:
Burcin Yurtoglu