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The purpose of this paper is to focus on the characteristics, efficiencies and interaction of many alternative market governance modes, by the approach of comparative institutional experimentation.

First, a highly simplified model of market economy is developed, which is embedded in a three‐layer governance structure. Then the model is transplanted into laboratory experimentation, so the characteristics and efficiencies of different governance modes can be identified by observing the subjects' behaviors under them.

The experimental results show that the market with governance structure based on rule is more efficient than the market with governance only based on long relation and based on preference or belief, and the dynamic improvement of governance based on rule has a destructive effect on the governance based on relation and governance based on preference or belief.

These results have profound implications for the development or enhancement of market institutions in transition or developing countries.

This paper examines whether the adoption of Japan’s Stewardship Code by institutional investors influences their preference for investee companies' governance quality. The Code, introduced by the Financial Services Agency in 2014, promotes constructive engagement between institutional investors and investee companies. Engagement with investees should improve institutional investors' ability to assess governance quality across their portfolios. The paper examines if this results in a positive relationship between the levels of Code-compliant institutional shareholding and investee governance quality.

The association between Code-compliant institutional shareholding levels and a governance quality score is examined for Nikkei 500 companies.

A positive association is observed between shareholdings by Code-compliant institutional investors and investee governance, with board independence playing a key role. Analysis shows that the association between institutional shareholding and governance is stronger for the Code-compliant shareholding than for overall institutional shareholdings. In addition, no significant relationship is found between the levels of shareholding by non-Code-compliant institutional investors and the governance quality score of investee companies. Taken together, the results suggest that Code adoption strengthens institutional investors' preference for high-quality investee governance.

Despite the introduction of stewardship regulation worldwide, there is a scarcity of empirical research that examines its operation. The study contributes to the existing literature by providing insights into how compliance with stewardship regulation influences institutional investor decision-making.

The chapter examines the evolution of individual attitudes of the national political (parliamentarian) elite towards a supranational entity such as the European Union in the changing political context during times of economic crisis. General attitudes towards the European integration process and federal/intergovernmental preferences for governance are analysed with a hierarchical approach taking into account individual level data, party characteristics and the country context with a comparative perspective across three time points during the period of the economic crisis. Contrary to expectations, results show that supranational attitudes of the national political elites remained quite stable and the increasing presence of extremist parties in national parliaments did not have a significant effect, while individual drivers of attitudes, such as an instrumental evaluation of the benefits of EU membership and attachment to Europe remained key determinants.

This study aims to examine the institutional investors’ preferences for internal governance mechanisms (internal audit function and audit committee effectiveness) in an emerging country like Malaysia.

A sample of 2,020 yearly firm observations in Bursa Malaysia over the period 2009-2012 is used. The two-stage least squares using instrumental variables (IV-2SLS) analysis is used to examine the relationships. To corroborate the findings of this study, a regression based on a one-year lag of the independent variables is used. Furthermore, ordinary least square regression and Generalized Method of Moments using instrumental variables (IV-GMM) are used.

Positive associations are found between the internal audit function and audit committee effectiveness and the institutional ownership.

These findings imply that institutional investors gravitate to firms that have high investment in internal audit function and effective audit committee. These findings are consistent with the conjecture that institutional investors try to minimize monitoring and exit costs and meet their fiduciary responsibility by investing in better internal audit firms.

This study offers insights to policymakers interested in enhancing internal governance mechanisms to attract institutional investors.

Limited empirical studies have examined the relation between internal governance mechanisms (internal audit function and audit committee effectiveness) and institutional ownership. This study adds to the existing literature on the importance of internal governance mechanisms by documenting an association between internal audit function and audit committee effectiveness and institutional ownership in an emerging country like Malaysia.

This paper examines how the board of directors' attributes in terms of educational and professional backgrounds –that is board capital-, and demographics influence institutional ownership across listed companies in Latin America.

Based on unique hand-collected information of directors' educational and professional attributes across 427 firms in Latin America, the authors analyze the effects of directors' educational attainment, professional experience and demographic diversification on institutional investors' holdings.

Results show that grey investor ownership favors directors with graduate studies and diverse boards regarding gender and nationality. Independent investors value the directors' professional experience like former founders of a firm. Grey investors are more concerned with firm corporate governance mechanisms, consistent with the agency view. In contrast, independent institutional investors focus on business opportunities following the board of directors' resource-based view.

This study shows that board capital becomes a key determinant for institutional ownership in emerging markets.

This study extends previous literature on institutional investor preferences by providing empirical evidence that firm board capital becomes a collective asset that is central for institutional investors' investment choices for an emerging market case.

This paper aims to review empirical research on the relationship between institutional ownership (IO) and board governance (85 studies).

Based on agency and upper echelons theory, the heterogeneous monitoring function of specific types and the nature of institutional investors on board composition, compensation and chief executive officer (CEO) characteristics will be focused.

The author found that most studies have referred to archival studies, analyzed the impact of board governance on IO, focused on CEO characteristics, neglected IO heterogeneity and advanced regression models to address endogeneity concerns. In line with the theoretical framework, the relationship between total IO and board governance is heterogeneous. However, specific types such as foreign, dedicated and pressure-resistant institutions represent active monitoring tools and push for increased board governance.

The author provided useful recommendations for future research from a content and methodological perspective, e.g. the need for analyzing the impact of IO on sustainable board governance and other characteristics of top management team members, e.g. the chief financial officer.

As many regulatory bodies implemented regulations to promote shareholder rights and board governance, this literature review highlights the connections of both corporate governance mechanisms. Managers should conduct a careful and timely investor analysis and change the composition and compensation of the board of directors in line with institutional investors’ preferences.

This analysis makes useful contributions to prior research by focusing on IO and board governance, whereas the author structured the heterogeneous variables and results within the structured literature review. The authors guides researchers, regulatory bodies and business practice in this corporate governance topic.

This article canvasses the components that go to define the concept of governance and develops a framework to provide a coherent explanation of the dynamics of governance and the relationship between its many modes. To illustrate the validity of the governance framework, the paper focuses on the three primary patterns of governance as found in the “real” world; namely markets, hierarchies and networks. The impact of public management reforms of the past two decades is analysed in terms of these patterns of governance and a couple of specific reforms are looked at more closely. Through such discussion, it is possible to gain an appreciation of how the proposed JEWAL synthesis framework can help explain the dynamics of governance both at the level of society and at the level of groups or organizations. Finally, it is demonstrated how the framework is also applicable to governance of the individual’s personal life.

This study investigates how the interrelated elements of organizational roles – activities, motives, resources and relationships – are mobilized to construct a code of conduct for the proxy advisory (PA) industry in Europe.

This qualitative study uses archival documents from three consecutive regulatory consultations and 16 interviews with key stakeholders. It analyzes how different stakeholder groups (i.e. PA firms, investors, issuers and the regulator) perceive and mobilize the elements of PA firms’ role to construct the accountability regime’s boundaries (accountability problem and action, and users and providers of accounts).

This study shows how PA firms, investors, issuers and the regulator refer to the perceived motives behind PA firms’ activities to construct an accountability problem. The regulator accepted the motives of an information intermediary for PA firms’ role and required PA firms to develop a corresponding accountability action: a code of conduct. PA firms involved in developing the code of conduct formalized who is accountable to whom by aligning this accepted motive with their activities, relationships, and resources into a common role.

The study highlights how aligning role elements to reflect PA firms’ common roles enables the construction of an accountability regime that stakeholders accept as a means of regulation. Analyzing the role elements offers insights into the development and functioning of accountability regimes that rely on self-regulation. We also highlight the role of smaller regional firms in helping shape transnational accountability regimes.

This study aims to investigate how contractual vs. informal governance influences the performance of collaborative innovation projects considering their exploitation vs. exploration character.

Data are collected from a sample of 218 companies that have developed innovative projects in collaboration with other organizations. Regression models are estimated to test the hypotheses.

The results indicate that contractual governance is the most effective for co-exploitation projects compared to informal governance. Specialization in either contractual or informal governance is more effective for co-exploration projects.

Developing collaborative innovation projects with other organizations is an alternative for firms to innovate either by exploiting complementary assets or by exploring new opportunities. Thus, the success of the collaborative innovation project is significantly affected by the way the collaboration is governed. On the one hand, for co-exploitation projects, companies should rely on contracts to improve their performance. On the other hand, for co-exploration projects, governance may specialize in either contracts or informal mechanisms to reach higher performance.

Despite previous studies analyzing the effect of contractual or informal governance on the performance of collaborative innovation projects, no research has focused on comparing simultaneously these effects, by using the innovation character of the project of co-exploitation or co-exploration as a moderator. Therefore, this paper explores comparatively the most effective type of governance mechanism for co-exploitation and co-exploration projects.

The purpose of this paper is to synthesize empirical results relating to antecedents influencing differences in performance between business group (BG) affiliated firms and independent firms in emerging economies.

A metanalysis was conducted in this research in which samples were collected, and a continuous data set for figuring the differentiation between group and non-group variables was selected and analyzed. These variables included performance, diversification, ownership characteristics, firm characteristics and group characteristics.

The research presents a set of hypotheses from a model that shows the influences of factors moderating the differences between the performance of BG affiliates and independent firms, including governance and the kinds of strategic choices which these firms make. Four of the five hypotheses were totally supported, showing the importance of differentiating affiliates’ and independent firms’ performance in terms of ownership concentration, dividend payout, leverage, R&D, as well as diversification and a firm’s age and size.

The study focused its research on an examination of pyramid and cross-holding groups in order to reveal the role of the core firms. It also examines ownership concentration, as well as internal relationships with capital structure, and the effect which these have on firm performance, in order to further understand the relationship among BGs, corporate governance and performance in emerging-market economies.