The Mexican Governance Model: A Comparative Perspective
Understanding how well investors/shareholders are protected from expropriation by insiders—managers and controlling shareholders—is crucial to understand corporate governance in a given country. Legal frameworks influence the intensity of principal–principal problems within stakeholders and the effectiveness of internal corporate governance mechanisms in safeguarding them (Kumar and Zattoni 2016). Legal protection contributes to explain important differences among countries; ownership concentration, dividend policy, and access to finance, for example, are all influenced by legal protection. Because investors finance firms but do not run them, they face the risk of not seeing their ...
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