Institutional Antecedents of Corporate Governance Legitimacy

The authors studied panel data for corporate governance ratings in 50 countries between 1997 and 2005 to understand what the country-level predictors of corporate governance legitimacy might be. Using neo-institutional theory, they found that all three pillars of institutionalization influenced perceptions of corporate governance at the national level—specifically, (a) the greater the extent of law and order, (b) the more the culture emphasized global competitiveness, and (c) the less the prevalence of corruption, the higher the corporate governance legitimacy within a nation. This study refines and extends the comparative corporate governance literature, as well as the neo-institutional perspective.