Over the past several years, we have been devoting a considerable amount of space to special issues here at CGIR. Specifically, we have sponsored two special issues (out of six annual issues) every year since 2008 under the current editorial team. Special issues open up new lines of scholarly inquiry, deepen existing research streams, and broaden the engagement and contributions of different disciplines throughout the scholarly community. I am convinced that this is one of the reasons why our number of submissions, downloads, citations, and selectivity continues to increase, and it is why so many scholars share their precious time and expertise with us so generously.
In this first issue of our 20th year of operation, it was interesting for me to note that each article accepted for publication related to a previous or a future special issue under development for CGIR. For example, our lead article seeks to understand how national creditor rights influence R&D intensity at the firm level. In their examination of 21,000 firms operating in 41 countries, Seifert and Gonenc find that the stronger the creditor rights operating within a country, the lower the R&D investments made. Furthermore, they report that this relationship is stronger in market-based economies, but weaker in bank-based economies. Also, they find that the relationship is stronger when the firm is in financial distress (i.e., negative cash flow). Overall, this study demonstrates how national- and firm-level governance mechanisms can interact to influence firm outcomes. As such, it highlights the importance of our upcoming special conference on national governance bundles to be held at Cambridge University in September, 2012.
Our second article also addresses the interaction between national- and firm-level governance mechanisms. Bonini, Alkan, and Salvi seek to understand how venture capital ownership influences a wide variety of corporate governance decisions. Using primary data, they examined 164 firms operating in five different economies in North America and Europe. In general, they found that the greater the level of venture capital ownership, the more involved the board is in making governance decisions (e.g., CEO hiring influence, director selections, and executive compensation determination). However, they did not find that venture capital ownership was systematically related to strategic decisions (e.g., determining strategic direction, allocating strategic investments). Interestingly, they found that these relationships were much stronger in the United States than they were in European economies. As such, this study again highlights the importance of understanding how national- and firm-level governance mechanisms interact if we want to move towards a global theory of corporate governance.
The next article lays some interesting groundwork for our upcoming special issue on executive compensation. Specifically, Vieito provides a fascinating study on how CEO gender influences executive compensation within the top management team, and how both of these constructs influence firm performance. This ground-breaking study reveals that female CEOs are associated with higher levels of firm performance than their male counterparts. Furthermore, it empirically demonstrates that female CEOs, in general, discourage large compensation gaps within their top management teams. Professor Vieito takes an elegant competing theoretical approach to reveal that behavioral theory best explains the results for female CEOs, while tournament theory best explains the firm outcomes for male CEOs. While this study only considers firms within the United States, the theoretical and empirical outcomes provide major new insights for executive compensation, gender diversity, group dynamics, and firm performance.
Our fourth article also focuses on executive compensation. Notably, Kostiander and Ikäheimo conduct an in-depth field study of the role of compensation consultants in helping to determine the compensation scheme in a “highly constrained” governance environment. Specifically, they examine the compensation determination process in five state-owned firms in Finland which are under considerable public scrutiny and subject to fairly tight and very public compensation guidelines. Interestingly, they find that the self-serving “managerial entrenchment” approach, so prevalently reported in compensation studies performed in the United States, is evidently alive and well in state-owned firms operating in Finland as well. As such, the process insights are fascinating and the empirical results are somewhat surprising given the governance environment in question.
Ntim, Opong and Danbolt provide our fifth article which focuses on corporate governance disclosure practices and their relationship with firm value. This notable study reveals how financial markets react to disclosure associated with shareholders versus stakeholders in South Africa, the largest emerging economy in the African continent. The study reveals that the higher levels of disclosure associated with shareholders is associated with higher levels of firm value. However, firm disclosure associated with stakeholders bears no systematic relationship with firm value. Consequently, this study provides grist for the mill in our upcoming special conference focused on corporate social responsibility, which will be held in Berlin, Germany, later this year.
Our final study is a review article written by Zattoni and Van Ees. These two authors have served as the screening editors for CGIR since 2008, and they have been instrumental in helping us handle the huge influx of manuscripts while maintaining our relatively short review cycles and improving our quality of reviews. Notably, they report that they desk-rejected nearly 70% of all manuscripts submitted to the journal in 2009. While no one enjoys being desk-rejected, I know from personal experience how much authors appreciated our relatively fast desk-rejection cycle (under 3 days), and the personal feedback that Alessandro and Hans provide to each and every author. Furthermore, this article provides insights as to why an article gets desk-rejected, and what authors can do to improve their chances of getting published in our journal (which currently is accepting less than 7% of all submitted manuscripts). I am particularly pleased to note that the disciplinary diversity and geographic diversity of our published authors continues to expand. In sum, this article adds to our growing collection of corporate governance review articles, which was our first special issue for this editorial team back in 2008.
If you are interested in contributing to our upcoming special issues on national governance bundles or corporate social responsibility, please refer to the call for papers at the end of this issue. Of course, we are always interested in new contributions related to executive compensation, which will be published later this year, and review articles may be submitted to the journal at any time. If you can identify a special issue that the journal should consider for the future, please approach a member of our editorial team and collaborate with them to make a proposal. The listing of our editorial team is provided on our website and inside cover of our print journal.