RESEARCH ARTICLE
Corporate governance, blockholders, and financial distress: Global evidence
Mehmet Celiktas,
Mine Ugurlu,
Neslihan Yilmaz,
Corresponding Author
Mehmet Celiktas
Department of Management, Boğaziçi University, Bebek/Istanbul, Turkey
Correspondence
Mehmet Celiktas, Department of Management, Boğaziçi University, 34342 Bebek/Istanbul, Turkey.
Email: [email protected]
Search for more papers by this authorMine Ugurlu
Department of Management, Boğaziçi University, Bebek/Istanbul, Turkey
Search for more papers by this authorNeslihan Yilmaz
Department of Management, Boğaziçi University, Bebek/Istanbul, Turkey
Search for more papers by this authorMehmet Celiktas,
Mine Ugurlu,
Neslihan Yilmaz,
Corresponding Author
Mehmet Celiktas
Department of Management, Boğaziçi University, Bebek/Istanbul, Turkey
Correspondence
Mehmet Celiktas, Department of Management, Boğaziçi University, 34342 Bebek/Istanbul, Turkey.
Email: [email protected]
Search for more papers by this authorMine Ugurlu
Department of Management, Boğaziçi University, Bebek/Istanbul, Turkey
Search for more papers by this authorNeslihan Yilmaz
Department of Management, Boğaziçi University, Bebek/Istanbul, Turkey
Search for more papers by this authorFirst published: 16 November 2024
Abstract
This study examines the impact of corporate governance mechanisms and ownership structure on financial distress for 23 developed and 27 emerging countries across different markets and legal systems and during the crisis period. In developed markets, CEO duality increases distress, which can be mitigated through independent boards and majority blockholders. Independent boards, specifically in common-law countries, alleviate distress, yet, may escalate the adverse impact of blockholders as independent boards may not be effective monitors. In emerging markets (EM), independent boards increase distress, potentially reflecting political appointments. Institutional blockholders hurt firm financial health, though, strategic blockholders may substitute for board monitoring in weak governance environments. During the crisis period, a larger and independent board has the potential to decrease financial distress.
Open Research
DATA AVAILABILITY STATEMENT
The data that support the findings of this study are available from the corresponding author upon reasonable request.
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