The Impact of Interplay Between Formal and Informal Institutions on Corporate Governance Systems: a Comparative Study of CEECs
DOI:
https://doi.org/10.2478/cer-2018-0028Keywords:
corporate governance, formal institutions, informal institutions, corporate governance code, Central and Eastern European countries, CEEC, institutional asymmetry, interplay of institutions, LLSVAbstract
The central point of this paper is to present the results of comparative case study research concerning the impact of the interplay between formal and informal institutions in the corporate governance systems (CGS) of Central and Eastern European Countries (CEEC). Particular focus was put on the values of the corporate governance codes (CGC) of CEECs, as well as on transparent ownership structures, transactions with related parties, the protection of minority shareholders, independent members of supervisory boards, and separation between the CEO position and the chairman of the board of directors. The main subject of interest concerns two research areas: the character of the relationship between formal and informal institutions, as well as whether the interplay between them is relevant to the CGSs of CEECs. Moreover, the author investigates whether the CGCs of CEECs consist of regulations that are compatible with the values set up in preambles using research methods such as individual case study or deductive reasoning. The conclusion presented in the paper was drawn on the basis of a review of the literature and research on national and European corporate governance regulations, as well as the CGC of CEECs. The primary contribution this article makes is to advance the stream of research beyond any single country setting, and to link the literature on the interplay between formal and informal institutions related to CGSs in a broad range of economies in transition (‘catch up’ countries) like CEECs. This paper provides an understanding of how the interplay between formal and informal institutions may influence the CGCs of CEECs.
Downloads
References
Bauwhede, H.V., Willekens, M. (2008), Disclosure on Corporate Governance in the European Union, ‘Corporate Governance An International Review’, Vol. 16, No. 2.
Google Scholar
Blankenburg, E. (1994), The Infrastructure for Avoiding Civil Litigation: Comparing Cultures of Legal Behaviour in the Netherlands and West Germany, ‘Law & Society Review’, No. 28.
Google Scholar
Bohle, D., Greskovits, B. (2007), Neoliberalism, Embedded Neoliberalism, and Neocorporatism: Paths Towards Transnational Capitalism in Central‑Eastern Europe, ‘West European Politics’,No. 30(3).
Google Scholar
Cadbury, A. (1992), Report The Financial Aspects of Corporate Governance, UK: The Committee On the Financial Aspects of Corporate Governance and Gee and Co. Ltd., London.
Google Scholar
Collins, K. (2002), Clans, Pacts, and Politics in Central Asia, ‘Journal of Democracy’, Vol. 13, No. 3.
Google Scholar
Cuervo, A. (2002), Corporate Governance Mechanisms: a plea for less code of good governance and more market control, ‘Corporate Governance’, Vol. 10, No. 2.
Google Scholar
Czerniawski, R. (2011), Kierunki regulacji ustawowych w zakresie ładu korporacyjnego w Polsce [Directions of statutory regulations in the field of corporate governance in Poland], [in:] Dobija, D., Koładkiewicz, I. (eds.) Ład korporacyjny, Wolters Kluwer, Warszawa.
Google Scholar
Directive 2006/46/EC of the European Parliament and of the Council of 14 June 2006 amending Council Directives 78/660/EEC on the annual accounts of certain types of companies, 83/349/EEC on consolidated accounts, 86/635/EEC on the annual accounts and consolidated accounts of banks and other financial institutions and 91/674/EEC on the annual accounts and consolidated accounts of insurance undertakings, (Official Journal of the EU, L224/1).
Google Scholar
Djankov, S., La Porta, R., Lopez‑de‑Silanes, F., Shleifer, A. (2002), The regulation of entry. ‘Quarterly Journal of Economics’, No. 117.
Google Scholar
EBRD (2017), Corporate Governance in Transition Economies Country Report from Bulgaria, Croatia, Latvia, Lithuania, Hungary, Poland, Romania, Slovakia, Slovenia, European Bank for Reconstruction and Development.
Google Scholar
Estrin, S., Prevezer, M. (2011), The role of informal institutions in corporate governance: Brazil, Russia, India, and China compared, ‘Asia Pacific Journal of Management’, Vol. 28, No. 1.
Google Scholar
European Commission (2011), Green Paper The EU corporate governance framework, COM (2011) 164 final.
Google Scholar
European Commission (2012), Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions Action Plan: European company law and corporate governance – a modern legal framework for more engaged shareholders and sustainable companies, COM (2012) 740 final.
Google Scholar
European Commission (2014), Proposal for a Directive of the European Parliament and of the Council amending Directive 2007/36/EC as regards the encouragement of long‑term shareholder engagement and Directive 2013/34/EU as regards certain elements of the corporate governance statement, COM (2014) 2013 final.
Google Scholar
European Commission (2017), Special Eurobarometer 470, Corruption, https://data.europa.eu/euodp/data/dataset/S2176_88_2_470_ENG (accesed: 24.05.2018).
Google Scholar
European Commission (2018a), Flash Eurobarometer 461, Report Perceived independence of the national justice systems in the EU among the general public, https://data.europa.eu/euodp/data/dataset/S2168_461_ENG (accesed: 24.05.2018).
Google Scholar
European Commission (2018b), Standard Eurobarometer 89, http://ec.europa.eu/commfrontoffice/publicopinion/index.cfm/Survey/getSurveyDetail/instruments/STANDARD/surveyKy/2180 (accesed: 24.05.2018).
Google Scholar
Eurostat (2013), Subjective well‑being and trust items, by country, http://ec.europa.eu/eurostat/statistics‑explained/index.php?title=File:Subjective_well‑being_and_trust_items,_by_country,_2013.png&oldid=235236 (accesed: 24.05.2018).
Google Scholar
ESS (2014), European Social Survey Round 7, http://www.europeansocialsurvey.org/download.html?file=ESS7e01&y=2014 (accesed: 24.05.2018).
Google Scholar
Filatotchev, I., Jackson, G., Nakajima C. (2013), Corporate governance and national institutions: An emerging research agenda, ‘Asia Pacific Journal of Management’, No. 30(4).
Google Scholar
Gad, J. (2015), The Relationship Between Supervisory Board And Management And Their Communication Process In Publicly Listed Companies In Poland, ‘Comparative Economic Research. Central and Eastern Europe’, Vol. 18, No. 2.
Google Scholar
Gibson, J.L., Caldeira, G.A. (1996), The legal cultures of Europe, ‘Law & Society Review’, Vol. 30, No. 1.
Google Scholar
Gilson, R.J. (1996), Corporate Governance and Economic Efficiency: When Do Institution Matter?, ‘Washington University Law Review’, Vol. 74, No. 327, Issue 2.
Google Scholar
Godlewska, M. (2018), Wpływ instytucji formalnych i nieformalnych na działalność innowacyjną polskich przedsiębiorstw sektora MSP [Impact of formal and informal institutions on innovative activities of Polish SMEs ], ‘Nierówności Społeczna a Wzrost Gospodarczy’, No. 54(2).
Google Scholar
Hamilton‑Hart, N. (2000), The Singapore State Revisited, ‘The Pacific Review’, Vol. 13, No. 2.
Google Scholar
Hampel, R. (1998), Committee on Corporate Governance Final Report, UK: The Committee on Corporate Governance and Gee Publishing Ltd., London.
Google Scholar
Healy, P.M., Palepu, K.G. (2001), Information asymmetry, corporate disclosure, and the capital markets: A review of the empirical disclosure literature, ‘Journal of Accounting and Economics’, Vol. 31, No. 1–3.
Google Scholar
Helmke, G., Levitsky, S. (2004), Informal Institutions and Comparative Politics: A Research Agenda, ‘Perspectives on Politics’, Vol. 2, No. 4.
Google Scholar
Higgs, D. (2003), Review of the role and effectiveness of non‑executive directors, UK: The Department of Trade and Industry, London.
Google Scholar
Hopt, K.J. (2011), Comparative Corporate Governance: The State of the Art and International Regulation,) ‘American Journal of Comparative Law’, Vol. 59.
Google Scholar
Inglehart, R., Haerpfer, C., Moreno, A., Welzel, C., Kizilova, K., Diez‑Medrano, J., Lagos, M., Norris, P., Ponarin, E., Puranen, B. (eds.) (2014). World Values Survey: Round Six – Country‑Pooled Datafile 2010–2014, JD Systems Institute, Madrid.
Google Scholar
Judge, W., Douglas, T., Kutan, A. (2009), Institutional antecedents of corporate governance legitimacy, ‘Journal of Management’, No. 34.
Google Scholar
Juttig, J., Drechsler, D., Bratsch, S., de Soysa, I. (eds.), (2007), Informal institutions, How social norms help or hinder development, OECD.
Google Scholar
La Porta, R., Lopez‑de‑Silanes, F., Pop‑Eleches, C., Shleifer, A. (2004), Judicial checks and balances, ‘Journal of Political Economy’, No. 112(2).
Google Scholar
La Porta, R., Lopez‑de‑Silanes, F., Shleifer, A. (2008), The economic consequences of legal origins, ‘Journal of Economic Literature’, No. 46(2).
Google Scholar
La Porta, R., Lopez‑de‑Silanes, F., Shleifer, A., Vishny, R. (1998), Law and finance, ‘Journal of Political Economy’, No. 106(6).
Google Scholar
Lewis, R.D. (2006), When Cultures Collide: Leading Across Cultures, Nicholas Brealey International, London.
Google Scholar
Mallin, C. (2002), The Relationship between Corporate Governance, Transparency and Financial Disclosure, ‘Corporate Governance: An International Review’, No. 10.
Google Scholar
North, D.C. (1990), Institutions, Institutional Change, and Economic Performance. Cambridge University Press, New York.
Google Scholar
Pajuste, A. (2002), Corporate Governance and Stock Market Performance in Central and Eastern Europe. A Study of nine countries, 1994–2001, ‘UCL SSEES Economics and Business Working Paper Series 22’, UCL School of Slavonic and East European Studies.
Google Scholar
Patel, S.A., Balic, A., Bwakira, L. (2002), Measuring transparency and disclosure at firm‑level in emerging markets, ‘Emerging Markets Review’, No. 3.
Google Scholar
Peng, M.W., Heath, P.S. (1996), The growth of the firm in planned economies in transition: institutions, organizations, and strategic choice, ‘Academy of Management Review’, Vol. 21, No. 2.
Google Scholar
Peng, M.W. (2002), Towards an institution‑based view of business strategy. ‘Asia Pacific Journal of Management’, No. 19(1–2).
Google Scholar
Scerbina‑Dalibagiene, S., Levisauskaite, K. (2009), The Conception of Corporate Governance in the European Union, ‘Taikomoji ekonomika: sisteminai tyrimai’, No. 3(2).
Google Scholar
Schmidt, R.H., Spindler, G. (2000), Path Dependence, Corporate Governance and Complementarity, ‘Working Paper Series: Finance & Accounting’, No. 27.
Google Scholar
Schwartz, S.H., Bardi, A. (1997), Influences of Adaptation to Communist Rule on Value Priorities in Eastern Europe, ‘Political Psychology’, Vol. 18, No. 2.
Google Scholar
Scott, R.W. (1987), The Adolescence of Institutional Theory, ‘Administrative Science Quarterly’, Vol. 32, No. 4.
Google Scholar
Siems, M.M. (2006), Legal Origins: Reconciling Law & Finance and Comparative Law, ‘Working Paper No. 321’, Centre for Business Research, University of Cambridge.
Google Scholar
Słomka‑Gołębiewska, A., Urbanek, P. (2014), Executive Remuneration Policy At Banks In Poland After The Financial Crisis – Evolution Or Revolution?, ‘Comparative Economic Research. Centraland Eastern Europe’, Vol. 17, No. 2.
Google Scholar
Steier, L. (2009), Familial capitalism in global institutional contexts: Implications for corporate governance and entrepreneurship in East Asia, ‘Asia Pacific Journal of Management’, No. 26(3).
Google Scholar
Studziński, J. (2016), Ład korporacyjny w Polsce [Corporate governance in Poland], Warszawa.
Google Scholar
Stulz, R.M., Williamson, R. (2003), Culture, openness, and finance, ‘Journal of Financial Economics’, Vol. 70, Issue 3.
Google Scholar
Tirole, J. (2001), Corporate Governance, ‘Econometrica’, Vol. 69, No. 1.
Google Scholar
Urbanek, P. (2009), CEOs Remuneration in Corporate Governance Codes in EU Member Countries, ‘Comparative Economic Research. Central and Eastern Europe’, Vol. 12, No. 1–2.
Google Scholar
Williams, N., Vorley, T., Williams, C. (2017), The Causes and Consequences of Institutional Asymmetry, Rowman & Littlefield International Ltd., London, New York.
Google Scholar
Williamson, O.E. (2000). The new institutional economics: taking stock, looking ahead, ‘Journal of economic literature’, Vol. XXXVIII.
Google Scholar
Ząbkowicz, A., Gruszewska, E. (2016), Instytucje w działaniu – skutki motywacyjne w dziedzinie polityki gospodarczej [Institutions in action – motivational effects in the field of economic policy], [in:] Rudolf S. (ed.) Nowa Ekonomia Instytucjonalna a Nauki o Zarządzaniu, Prace Naukowe Wyższej Szkoły Bankowej w Gdański, Tom 48, Wyższa Szkoła Bankowa w Gdański, Gdańsk.
Google Scholar
Zattoni, A., Cuomo, F. (2008), Why Adopt Codes of Good Governance? A Comparison of Institutional and Efficiency Perspectives, ‘Corporate Governance’, Vol. 16, No. 1.
Google Scholar
Bulgaria (2012), Bulgarian Code For Corporate Governance, Bulgarian National Code For Corporate Governance.
Google Scholar
Croatia (2010), Corporate Governance Code, The Zagreb Stock Exchange, Croatian Financial Services Supervisory Agency.
Google Scholar
The Czech Republic (2004), Corporate Governance Code based on the OECD Principles, Czech Securities Commission.
Google Scholar
Estonia (2006), Corporate Governance Recommendations, The Tallinn Stock Exchange.
Google Scholar
Hungary (2012), Corporate Governance Recommendations, Budapest Stock Exchange.
Google Scholar
Latvia (2010), Principles of Corporate Governance and Recommendations on Their Implementation, NASDAQ OMX Riga.
Google Scholar
Lithuania (2009), The Corporate Governance Code for the Companies Listed on NASDAQ OMX Vilnius.
Google Scholar
Poland (2016), Best Practice for GPW Listed Companies, GPW.
Google Scholar
Romania (2015), Code of Corporate Governance, Bucharest Stock Exchange.
Google Scholar
Slovakia (2008), Corporate Governance Code for Slovakia, Central European Corporate Governance Association.
Google Scholar
Slovenia (2016), Slovenian Corporate Governance Code for Listed Companies, Ljubljana Stock Exchange.
Google Scholar
Downloads
Published
How to Cite
Issue
Section
License
This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.
