Bundles of Firm Corporate Governance Practices: A Fuzzy Set Analysis


  • Roberto García-Castro,

  • Ruth V. Aguilera,

  • Miguel A. Ariño

Address for correspondence: Roberto García-Castro, IESE Business School, Camino del Cerro del Águila, 3, 28023 Madrid, Spain. E-mail: rgarcia@iese.edu


Manuscript Type


Research Question/Issue

We explore how the combinations of firm-level corporate governance (CG) practices embedded in different national governance systems lead to high firm performance.

Research Findings/Insights

Using fuzzy set/qualitative comparative analysis, we uncover a variety of findings. First, we show that within each of the stylized national CG models, there are multiple bundles of firm-level governance practices leading to high firm performance (i.e., equifinality). Second, we provide evidence of complementarity as well as functional equivalence between CG practices. Finally, we demonstrate that there can be heterogeneity (“differences in kind”) in firm governance practices within each stylized model of CG.

Theoretical/Academic Implications

We build on the configurational and complementarity-based approaches to make the following theoretical claims. First, governance practices within firm bundles do not always relate to each other in a monotonic and cumulative fashion as this entails higher costs and possibly over-governance. Second, practices in bundles do not need to be aligned toward the insider or the outsider model (“similar in kind”). We argue that non-aligned practices can also be complementary, creating hybrid governance forms. Third, we predict functional equivalence across bundles of CG practices which grants firms agency on which of the practices to implement in order to achieve high performance.

Practitioner/Policy Implications

We contribute to comparative CG research by demonstrating that there are multiple governance paths leading to high firm performance, and that these practices do not always belong to the same national governance tradition. Therefore, our findings alert of the perils of “one size fits all” governance solutions when designing and implementing CG policies.