Globalization of Corporate Governance: The American Influence on Dismissal Performance Sensitivity of European CEOs

Jochen J. Jungeilges, Lars Oxelheim, Trond Randøy
2010 Social Science Research Network  
We examine how globalization of corporate governance practices influences the dismissal risk of European CEOs. It is hypothesized that the harsh monitoring of the American corporate governance system influences European CEOs' dismissal performance sensitivity, indirectly and directly. The former materializes via European firms cross-listing on U.S. exchanges, the latter results from European firms hiring American independent board members. Both influences are hypothesized to result in increased
more » ... result in increased dismissal performance sensitivity. Based on data from the 250 largest European publicly traded firms we find a significant increase in the dismissal sensitivity in poorly performing companies with American board membership. JEL classification: G15, G18, G32, M14, M16, M52
doi:10.2139/ssrn.1554406 fatcat:2ymkczrxbrdfnmcpvf6l6s6roa