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Globalization of Corporate Governance: The American Influence on Dismissal Performance Sensitivity of European CEOs

Jungeilges, Jochen A.; Oxelheim, Lars LU and Randöy, Trond (2010) In IFN Working Paper No. 823.
Abstract
This study examines how globalization of corporate governance practices influence the risk of European CEOs being dismissed. We argue that the harsh monitoring of the American corporate governance system spills over to the rest of the world as a result of this globalization. We focus on direct and indirect American influence on the dismissal performance sensitivity among the 250 largest European publicly listed firms. The indirect influence is assumed to materialize via European firms cross-listing on U.S. exchanges, whereas the direct influence is assumed to appear as a result of European firms hiring of American independent board members. Both sources of influence are hypothesized to result in increased dismissal performance sensitivity.... (More)
This study examines how globalization of corporate governance practices influence the risk of European CEOs being dismissed. We argue that the harsh monitoring of the American corporate governance system spills over to the rest of the world as a result of this globalization. We focus on direct and indirect American influence on the dismissal performance sensitivity among the 250 largest European publicly listed firms. The indirect influence is assumed to materialize via European firms cross-listing on U.S. exchanges, whereas the direct influence is assumed to appear as a result of European firms hiring of American independent board members. Both sources of influence are hypothesized to result in increased dismissal performance sensitivity. The empirical results show a significant increase in the dismissal sensitivity in poorly performing companies with American board membership whereas no significant increase is found from cross-listing in the U.S. (Less)
Please use this url to cite or link to this publication:
author
organization
publishing date
type
Working Paper
publication status
unpublished
subject
keywords
CEO dismissal, performance sensitivity, globalization, corporate governance, foreign board membership, institutional contagion
in
IFN Working Paper No. 823.
language
English
LU publication?
yes
id
2c0f843c-99eb-4524-9693-8c1413552cec (old id 1580631)
alternative location
http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1554406
date added to LUP
2010-09-20 12:29:54
date last changed
2016-07-05 14:28:30
@misc{2c0f843c-99eb-4524-9693-8c1413552cec,
  abstract     = {This study examines how globalization of corporate governance practices influence the risk of European CEOs being dismissed. We argue that the harsh monitoring of the American corporate governance system spills over to the rest of the world as a result of this globalization. We focus on direct and indirect American influence on the dismissal performance sensitivity among the 250 largest European publicly listed firms. The indirect influence is assumed to materialize via European firms cross-listing on U.S. exchanges, whereas the direct influence is assumed to appear as a result of European firms hiring of American independent board members. Both sources of influence are hypothesized to result in increased dismissal performance sensitivity. The empirical results show a significant increase in the dismissal sensitivity in poorly performing companies with American board membership whereas no significant increase is found from cross-listing in the U.S.},
  author       = {Jungeilges, Jochen A. and Oxelheim, Lars and Randöy, Trond},
  keyword      = {CEO dismissal,performance sensitivity,globalization,corporate governance,foreign board membership,institutional contagion},
  language     = {eng},
  series       = {IFN Working Paper No. 823.},
  title        = {Globalization of Corporate Governance: The American Influence on Dismissal Performance Sensitivity of European CEOs},
  year         = {2010},
}