The Effect of Divergent Corporate Governance on Global Diversification Wealth Effect across Industries
نویسنده
چکیده
The more profound global diversification wealth effect for acquiring firm shareholders in the last decade as well as corporate governance characteristics are found varying with the industry affiliations of the acquirers. The divergent corporate governance across industries appears to explain the differential wealth effect. Manufacturing industries benefit the most through globalization but their gain is not affected by corporate governance factors. Both are believed to be the consequence of their industry characteristics, such as more abundant firm-specific and information-based assets, internalization, and ownership advantages. Corporate governance characteristics do impact cross-border diversification firm value gain for non-manufacturing firms. Better corporate governance scheme in place does lead to greater shareholder wealth increase. Among non-manufacturing industries, external corporate governance system is especially vital for non-service firms.
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