Research output: Contribution to Journal/Magazine › Journal article › peer-review
| <mark>Journal publication date</mark> | 09/2006 |
|---|---|
| <mark>Journal</mark> | Corporate Governance: An International Review |
| Issue number | 5 |
| Volume | 14 |
| Number of pages | 14 |
| Pages (from-to) | 432-445 |
| Publication Status | Published |
| <mark>Original language</mark> | English |
| Event | 28th Annual Congress of the European-Accounting-Association - Goteborg, Sweden Duration: 18/05/2005 → 20/05/2005 |
| Conference | 28th Annual Congress of the European-Accounting-Association |
|---|---|
| Country/Territory | Sweden |
| Period | 18/05/05 → 20/05/05 |
Since 2002 company law requires listed German corporations to declare their degree of conformity to the German Corporate Governance Code (GCGC). We examine whether there is a pricing effect connected to the declared degree of compliance for a sample of (big) publicly traded German companies listed in the DAX 30 and MDAX. We find that the degree of compliance with the Code is value-relevant after controlling for an endogeneity bias. This shows that the capital markets find the rules in the code meaningful and that there is capital market pressure to adopt the Code regulation. Our findings also suggest that the capital market fills a possible "control vacuum" resulting from the withdrawal of commercial banks from their (former) influential role in the German "insider control" corporate governance model.