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    This article has been cited by the following publications. This list is generated based on data provided by CrossRef.

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  • Journal of Financial and Quantitative Analysis, Volume 47, Issue 6
  • December 2012, pp. 1187-1214

Corporate Governance, Finance, and the Real Sector

  • Paolo Fulghieri (a1) and Matti Suominen (a2)
  • DOI:
  • Published online: 02 November 2012

We present a theory of the linkages between corporate governance, corporate finance, and the real sector of an economy. Using a structural model of industry equilibrium with endogenous entry, we show that poor corporate governance leads to low levels of competition, and to firms with high insider ownership and leverage. In contrast, good corporate governance promotes the adoption of more efficient technologies and development of sectors more exposed to moral hazard. We use our model to study equity market liberalization, and we show that liberalizations facilitate entry and adoption of more productive technologies, especially in countries with good corporate governance.

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