This study aims to examine the impact of regulatory quality on the corporate governance practices of multinational corporations (MNCs) within an increasingly globalized economic landscape. Corporate governance practices are recognized as being shaped not only by internal organizational factors but also significantly constrained and influenced by the external institutional environment, with regulatory quality being a pivotal element. Adopting a comparative institutional analysis framework, this research investigates a diverse sample of MNCs headquartered across various countries and regions with differing regulatory profiles. The relationship between their specific corporate governance practices and the quality of local regulation is rigorously analyzed, primarily through the application of econometric models. The empirical results demonstrate a statistically significant positive influence of regulatory quality on corporate governance standards. Specifically, in environments characterized by higher regulatory quality—marked by effective policy implementation, reasonable regulatory burden, and strong rule of law—MNCs exhibit a pronounced tendency to implement more sophisticated and robust governance mechanisms. These manifest as enhanced board independence, better-aligned executive compensation incentives, and superior information disclosure quality. The study contributes meaningfully to the theoretical discourses in corporate governance and institutional economics by delineating the specific channels through which formal institutions shape firmlevel governance choices. Practically, it offers valuable guidance for MNCs in navigating diverse institutional settings and provides evidence-based insights for policymakers seeking to enhance national regulatory frameworks to foster better corporate conduct.
Xiao Wang (Tue,) studied this question.
Synapse has enriched 5 closely related papers on similar clinical questions. Consider them for comparative context: