Institutional contextuality of business best practices : the persistent cross-national diversity in the creation of corporate governance codes

The persistent cross-national diversity in the creation of corporate governance codes In thisthesis, I presentthree main lines of research. First, by incorporating the effect of national culture, I offer a novel perspective on cross-national diversity in the worldwide diffusion of corporate governance codes (CGCs). Second, I explore the process of institutionalization of such codes in the UK, which reflects this institutional contextuality. Third, I examine how the causal complexity and cross-na¬tional diversity of actor-centered institutions affect the characteristics of CGCs. My findings have several implications. First, cultural characteristics perform well in explaining the patterns of cross-national diversity in the creation of CGCs. Sec¬ond; the UK codification process indicates the potential value of social and institutional structures in explaining this creation. Finally, the interaction effects support the idea that the reciprocal constitution and change of inter¬twined actors have a critical influence on how the institu¬tions take shape and evolve. CGCs, as part of institutional change, are best understood as components of an evolv¬ing actor-centered institutional dynamic

Explaining diversity in the worldwide diffusion of codes of good governance

Extending earlier literature on diffusion of codes of good governance (CGGs) by integrating the effect of national culture, this study offers a novel perspective on cross-national diversity in the worldwide diffusion of corporate governance best practices. We argue that particular cultural dimensions affect the indicators (i.e., total number of codes per country and identity of issuing organizations) of such diffusion. For a sample of 67 countries our analysis reveals that individualist cultures have a stronger tendency to develop CGGs. In cultures with a high receptivity to power differences there is a higher probability that the first issuers are the government, directors’ or professional associations; whereas with low receptivity, the stock exchange and investors’ groups of issuers are more likely to initiate the first code. The effects of culture remain significant even after accounting for differences in legal systems and economic institutions, indicating that national culture may serve as a comprehensive indicator of the regulatory stance with respect to good governance. Indeed, the effect size is large enough to give pause (e.g., to a location choice), and possibly has relevance for strategic decision-making by international companies

Explaining diversity in the worldwide diffusion of codes of good governance

Extending earlier literature on diffusion of codes of good governance (CGGs) by integrating the effect of national culture, this study offers a novel perspective on cross-national diversity in the worldwide diffusion of corporate governance best practices. We argue that particular cultural dimensions affect the indicators (i.e., total number of codes per country and identity of issuing organizations) of such diffusion. For a sample of 67 countries our analysis reveals that individualist cultures have a stronger tendency to develop CGGs. In cultures with a high receptivity to power differences there is a higher probability that the first issuers are the government, directors’ or professional associations; whereas with low receptivity, the stock exchange and investors’ groups of issuers are more likely to initiate the first code. The effects of culture remain significant even after accounting for differences in legal systems and economic institutions, indicating that national culture may serve as a comprehensive indicator of the regulatory stance with respect to good governance. Indeed, the effect size is large enough to give pause (e.g., to a location choice), and possibly has relevance for strategic decision-making by international companies.