Herr

The Influence of Foreign Direct Investment on the Corporate Governance Environment
– Conceptual Analyses and Empirical Evidence

vorgelegt von Diplom-Ingenieur Christoph Bernhard Nedopil aus München

von der Fakultät VII – Wirtschaft und Management der Technischen Universität Berlin zur Erlangung des akademischen Grades Doktor der Wirtschaftswissenschaften Dr.rer.oec.

genehmigteDissertation

Promotionsausschuss:

Vorsitzender: Prof. Dr. Axel Hunscha Berichter: Prof. Dr. Ulrich Steger Berichter: Prof. Dr. Jonas Schreyögg

Tag der wissenschaftlichen Aussprache: 31.10.2008

Berlin 2008 D 83

Abstract (english)
It has often been conceptually and empirically shown that corporate governance impacts firm finance and the development of the country’s financial markets.Consequently it has been suggested to improve corporate governance in order to support not only stock markets development but also economic development. This idea though has two major shortcomings: (i) an unclear definition of “good” corporate governance and (ii) insufficient knowledge of how corporate governance develops and changes. While the first question can probably never be answered due todiffering interests of various stakeholders, this study aims at answering the second question conceptually and empirically. In a first step the concept of the corporate governance environment is developed, which explicates how corporate governance is embedded in legal and sublegal standards as well as in behaviors and norms of the society. In a second step a conceptual framework of a changing corporategovernance environment is developed by employing new institutional economics and institutional theory. As can be shown conceptually, international factor flows including foreign investments influence the development of the corporate governance environment – the very variable corporate governance is often trying to affect, which leads to a reverse causality. This finding is tested empirically with anovel dataset compiled from the IMD World Competitiveness Center, the World Bank, PRS Group, UNSTATS and EUROSTATS including data from 1991-2005. The empirical part employs econometrical analyzes to study the influence of foreign direct investments from developed countries on the evolution of corporate governance environments in developing countries. It can be found that under certaincircumstances an improvement can be registered accordingly with the source country’s CGE, supporting the developed conceptual framework. The findings of this study on the one hand help the academic debate on corporate governance, and on the other they advance the economic and political discussion whether foreign investors influence various institutions relevant for doing business. Hence, the results of thisresearch can help policy makers and advisors as well as other institutions interested in economic development – both in developing and developed economies - to better understand institutional evolution and with that the effects of globalization.

Abstract (deutsch)
In der Wissenschaft konnte schon mehrmals konzeptionell und empirisch nachgewiesen warden, dass Corporate Governance einenEinfluss auf Unternehmensfinanzierung oder auch die Entwicklung von Finanzmärkten hat. Demnach wurde des öfteren vorgeschlagen Corporate Governance in einem Land oder einer Firma zu verbessern um nicht nur die Entwicklung von Aktienmärkten zu fördern, sondern auch die allgemeine ökonomische Entwicklung. Dieser Gedanke hat jedoch zwei wesentliche Schwächen: (i) ein unklares Verständnis über „gute“Corporate Governance und (ii) unzureichendes Wissen über die Entwicklung und Veränderung der Corporate Governance. Während die erste Frage wahrscheinlich niemals abschliessend beantwortet werden kann, unter anderem wegen unterschiedlichen Interessen der verschiedenen Stakeholder der Corporate Governance, versucht diese Studie die zweite Thematik konzeptionell und empirisch zu bearbeiten. In einem...