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Emerging Markets Corporate Governance Research Network (EMCGN) Newsletter, April 2011

Dear colleagues,

The third International Conference on Corporate Governance in Emerging Markets is approaching. 36 papers out of more than 200 submissions have been accepted and announced on the conference Web site. On behalf of the organizing committee, I would like to thank the EMCGN members for their interest and support.

In our second issue of EMCGN Newsletter, we start our Publications section with Randall Morck's latest paper, which annotates the role of business groups in developing countries in economic development. Developing countries are not "America, but poorer" Morck argues. "Understanding good governance in less developed countries requires understanding business groups." We continue with Mark J. Roe's paper, in which he investigates the links between polity and capital markets in developed and emerging economies.

The papers that follow Morck's and Roe's papers are empirical. The first one by Lin, Ma, Maletesta and Xuan is a cross country study that confirms that the divergence between control rights and cash-flow rights in the borrowing firms exacerbates potential tunneling and other moral hazard activities by controlling shareholders, thereby increases the credit risk and monitoring needs. The second one by Qian, Pan and Yeung, based on data on China, finds that politically connected firms are more likely to expropriate minority shareholders.

In the Opinions section we present reports on Russia, Taiwan (China) and Turkey. The reports on Russia and Taiwan (China) give concrete suggestions and constructive comments on how to implement more powerful governance strategies. We conclude this section with an IFC publication on the current status of "sustainable investments" in Turkey.

Melsa Ararat, Sabanci University

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