The objective of this research project was to gain insight in the European corporate governance structure. Over the past decade, corporate governance has attracted significant attention in the corporate and financial world as well as in academic circles. Still, whereas the Anglo-American governance paradigm has been well developed, research on the Continental European framework has been lagging, mainly due to lack of high quality data. The adoption of legal disclosure requirements by most European countries at different times throughout the 1990s on, e.g., ownership structures and managerial remuneration, eventually enabled us to investigate the relative merits and deficits of particular corporate governance systems. We collected information on all corporate governance regimes of European countries (1990-2005). We subsequently tested whether or not corporate governance regulation is related to the premiums in takeovers (in other words, are firms willing to pay for specific corporate governance characteristics of firms they want to take over?). To achieve this aim, information of takeover activity in Europe needed to be calculated, more specifically information on bidders, targets and the takeover bid.
This research project thus aimed to answer questions with a direct scientific and societal relevance:
- how to (re)design corporate governance systems to obtain higher corporate performance, growth, productivity or lower cost of capital?
- how to avoid suboptimal corporate investments?
- how to align corporate governance regulation such that inefficiencies in the market for corporate control (mergers and acquisitions) can be amended?