Corporate Governance

Why does this study focus on corporate governance: the institutions that govern stakeholder relationships between management, shareholders and creditors? Two reasons motivate the analysis. First, corporate governance institutions are important for company performance. Because of conflicting objectives of various agents and the incompleteness of contracts, corporate governance institutions are needed to strengthen company performance. Second, these institutions differ across countries, in particular between the United States and Germany. So a comparative study may provide scope to learn about the impact of such institutions.