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Institutional Aspects, Regulation and Policy

The Tilburg team will lead on and oversee this theme, which will involve members of the following nodes:

ECGI Universiteit van Amsterdam (UvA)
ULB Stiefelsen Östekonomiska Institutet (SITE)
Center for Financial Studies (CFS) London Business School (LBS)
Università degli Studi di Genova Swiss Federal Institute of Technology, Zürich
Stichtung Katholieke Universiteit Brabant McGraw-Hill International (UK) Ltd (Standard & Poor’s)

Objectives
to provide conclusive answers to open research questions in this area;
to use industry links to access unique data;
to exploit the unique institutional features of Europe to produce unique insights that will be recognised internationally

Main projects
Corporate governance and EU Company law. This project will look at defaults regimes for EC Company Law. The research will focus on how corporate law decision makers should choose the legal default rules that govern corporations in Europe. A comparative project will look at US and EU Takeover Law Regulation asking to what degree the US and EU legal regimes regulating takeovers are likely to converge. The project will also look at freedom of choice in EU company law.
Political economy of corporate governance. This project focuses on the political decision that determines the degree of investor protection. It examines whether entrepreneurs and workers can strike a political agreement by which low investor protection is exchanged for high employment protection, and how this 'corporatist' agreement is feasible. The project will also examine the relationship between employment protection and M&A activity. A clear understanding of the nature of this political decision is a key factor in the effective promotion of economic growth and productivity.
Ratings and Surveys. The evaluation and rating of Corporate Governance and the associated analytical framework is a newly emerging area of research. Major index providers and exchanges are exploring the launch of indices that include companies considered to uphold high standards of corporate governance. Some countries have chosen to develop national governance rating methodologies (Greece, Germany etc) whereas international rating agencies conduct governance ratings based on international standards (Standard & Poor’s, Fitch, Deminor etc). These developments require a better understanding of the effectiveness of the existing analytical approaches as well as exploration of how governance rating methodologies can be standardized to help better inform investors. At Sabanci, researchers will work on an investor survey on Corporate Governance in Turkey making use of global surveys which explore the opinions of investors on what matters in making investment decisions. The surveys provide useful and practical insight to the market value associated with better governance.

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