Klapper, Leora F.Love, Inessa2013-07-012013-07-012002-04https://hdl.handle.net/10986/14319Recent research studying the link between law, and finance has concentrated on country-level investor protection measures, and focused on differences in legal systems across countries, and legal families. The authors extend this literature, and provide a study of firm-level corporate governance practices across emerging markets, and a greater understanding of the environments under which corporate governance matters more. Their empirical tests show that better corporate governance is highly correlated with better operating performance, and market valuation. More important, the authors provide evidence showing that firm-level corporate governance provisions, matter more in countries with weak legal environments. These results suggest that firms can partially compensate for ineffective laws, and enforcement by establishing good governance, and providing credible investor protection. The authors' tests also show that firm-level governance, and performance is lower in countries with weak legal environments, suggesting that improving the legal system, should remain a priority for policymakers.en-USCC BY 3.0 IGOACCOUNTABILITYACCOUNTINGAMERICAN ECONOMIC REVIEWAVERAGE PERFORMANCEBOOK VALUECAPITAL MARKETSCASH FLOWSCORPORATE GOVERNANCECORRELATION WITH GOVERNANCECORRUPTIONCOST OF CAPITALCOUNTRY AVERAGECOUNTRY COMPARISONCOUNTRY RISK GUIDECREDIBLE COMMITMENTDEGREE OF AGENCYDETERMINANTS OF GOVERNANCEDISCLOSUREDIVIDEND PAYOUTECONOMIC DEVELOPMENTECONOMIC GROWTHEFFECT OF GOVERNANCEEMERGING MARKETSEXCHANGE OF IDEASEXTERNAL FINANCEEXTERNAL FINANCINGGOOD GOVERNANCEGOVERNANCE DATAGOVERNANCE INDEXGOVERNANCE INDICATORSGOVERNANCE INDICESGOVERNANCE MEASUREGROWTH RATEGROWTH RATESIMPROVEMENT IN GOVERNANCEIMPROVEMENTS IN GOVERNANCEINCOMEINSTITUTIONAL ENVIRONMENTINTANGIBLE ASSETSINVESTOR PROTECTIONJUDICIAL REFORMJUDICIAL SYSTEMLAWSLEGAL INFRASTRUCTURELEGAL ORIGINSLEGAL PROTECTIONLEGAL SYSTEMLEGAL SYSTEMSLEGALITYMARKET VALUATIONMARKET VALUEPERFORMANCE MEASURESPOLICY IMPLICATIONSPOLICY RESEARCHPOLITICAL ECONOMYPOLITICIANSPOOR GOVERNANCEPRODUCTIVITYRETURN ON ASSETSRETURN ON EQUITYRULE OF LAWSHAREHOLDERSSHAREHOLDERS RIGHTSTRADINGTRANSPARENCYVOLATILITY CORPORATE GOVERNANCEINVESTOR PROTECTIONEMERGING ECONOMIESMARKET ACCESSLEGAL FRAMEWORKLAW ENFORCEMENTFINANCIAL LEVERAGEBUSINESS ENVIRONMENTMARKET VALUELEGAL INSTRUMENTSINVESTOR CONFIDENCEPERFORMANCE INDICATORSWorld Bank10.1596/1813-9450-2818