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Regarding the development of sustainable governance systems, many regulators have issued and developed self‐regulatory codes defining the characteristics and ideal features of government models. The adoption of codes of good governance could serve as a mechanism to increase the level of legal protection for minority shareholders. Thus, this paper aims to measure the effective compliance by Italian listed companies with the Italian Code's recommendations on related party transactions and to assess the level of legal protection for minority shareholders in the Italian stock market. Using a quantitative method, our findings suggest that FTSE MIB companies are effectively compliant and that public utilities companies are as well. We also carried out an ordinary least squares (OLS) regression and found that companies with a higher market value and a greater presence of independent and non‐executive directors assure a higher level of compliance. We observed that widely held firms have a positive effect on the level of legal protection for the minority shareholders. Our paper contributes to enriching the sustainable governance models, and it is directed to academic and practical communities. [ABSTRACT FROM AUTHOR]

Manuscript Type Empirical Research Question/Issue This study makes use of a large multi-country sample to examine how the market performance of family firms is affected by national context. Research Findings/Insights We find that Tobin's Q among family firms is significantly lower than that of non-family firms across 33 countries. In examining these effects, results suggest that legal context and national culture influence the performance implications of publicly traded family firms, serving to mitigate some of the generally negative impact. Theoretical/Academic Implications We find that national context is an important contingency in determining the family's ability and willingness to exploit minority shareholder wealth. Building upon our results, future research can focus on how formal and informal institutions may be substitutes for each other. Our results help explain why prior empirical research provides conflicting results regarding the impact of family governance on firm valuation. Practitioner/Policy Implications Our findings suggest that the performance implications of family firms are contingent on legal protections, belief in the impartiality of the legal system, and culture. Given wide variations in these measures across countries, the appropriate mechanisms to strengthen investor protection will not follow a one-size fits all approach. [ABSTRACT FROM AUTHOR]

Manuscript Type Empirical Research Question/Issue This paper addresses the issue of whether controlling family shareholders are exposed to market control. The paper advances the theory that the expected performance of controlling shareholders, inferred from their track records, is constantly reflected in the market value of controlled firms. Research Findings/Insights By using event-study methodology, we show that unexpected acts that are detrimental to minority shareholder interests performed by controlling family shareholders lead to short-term negative abnormal returns in firms that otherwise are completely unaffected by the detrimental acts, but are controlled by the same family-based business group. Theoretical/Academic Implications The results shed new light on the significance of track records in corporate governance that have implications for research on informal corporate governance mechanisms, governance of family firms, and, possibly, comparative corporate governance. The results also have tentative implications for the understanding of the function of family-controlled business groups consisting of industrially unrelated firms by suggesting a function that has heretofore been neglected. Practitioner/Policy Implications The results have implications for reform work in corporate governance by showing that practitioners and regulators must consider variability in non-legal corporate governance mechanisms when analyzing and attempting to change different national corporate governance systems to achieve desired effects. [ABSTRACT FROM AUTHOR]

Manuscript Type Empirical Research Question/Issue We combine agency and institutional theory to explain the division of equity shares between the foreign (majority) and local (minority) partners within foreign affiliates. We posit that once the decision to invest is made, the ownership structure is arranged so as to generate appropriate incentives to local partners, taking into account both the institutional environment and the firm-specific difficulty in monitoring. Research Findings/Insights Using a large firm-level dataset for the period 2003-2011 from 16 Central and Eastern European countries and applying selectivity corrected estimates, we find that both weaker host country institutions and higher share of intangible assets in total assets in the firm imply higher minority equity share of local partners. The findings hold when controlling for host country effects and when the attributes of the institutional environment are instrumented. Theoretical/Academic Implications The classic view is that weak institutions lead to concentrated ownership, yet it leaves the level of minority equity shares unexplained. Our contribution uses a firm-level perspective combined with national-level variation in the institutional environment, and applies agency theory to explain the minority local partner share in foreign affiliates. In particular, we posit that the information asymmetry and monitoring problem in firms are exacerbated by weak host country institutions, but also by the higher share of intangible assets in total assets. Practitioner/Policy Implications Assessing investment opportunities abroad, foreign firms need to pay attention not only to features directly related to corporate governance (e.g., bankruptcy codes) but also to the broad institutional environment. In weak institutional environments, foreign parent firms need to create strong incentives for local partners by offering them significant minority shares in equity. The same recommendation applies to firms with higher shares of intangible assets in total assets. [ABSTRACT FROM AUTHOR]

This study examines the dividend policies of privately held Belgian companies, differentiating between stand-alone companies and those affiliated with a business group. We find that privately held companies typically do not pay dividends. Compared to public companies, they are less likely to pay dividends and they have lower dividend payouts. Our results also suggest that group companies pay more dividends than stand-alone companies, consistent with the hypothesis that tax-exempt group firms redistribute dividend payments on the group's internal capital market. Group companies pay higher dividends if they have minority shareholders. [ABSTRACT FROM AUTHOR]