Special Issue of the Journal of International Business Studies


The role of financial and legal institutions 

in INTERNATIONAL corporate governance 



Special Issue Editors

*	Douglas Cumming (York University, Canada,
[log in to unmask]) 
*	Igor Filatotchev (City University London, UK,
[log in to unmask])
*	April Knill (Florida State University, USA, [log in to unmask])
*	Lemma Senbet (University of Maryland, USA, [log in to unmask])
*	David Reeb (National University of Singapore, Singapore,
[log in to unmask])


Deadline for submission:  August 31, 2015


Tentative publication date: Spring/Summer 2017



Nature of the Special Issue

Financial and legal institutions play key roles in facilitating governance
through monitoring and mitigating information asymmetries, thereby enhancing
international business and economic growth. Legal scholars emphasize that
auditors, financial analysis, and banks serve as reputational gatekeepers
that strongly influence capital market development (Coffee, 2002).
Economists observe that legal institutions, such as courts and regulatory
agencies, influence corporate finance and financial development by
supporting private contractual arrangements (Beck and Levine, 2008). Yet,
the development of financial and legal institutions varies widely across
countries and political regimes. In this special issue, we seek to encourage
diverse international business approaches to help foster the discourse on
the relative importance of financial and legal institutions for corporate
governance in different economies around the world. Further research is
warranted on exactly how these institutions influence asymmetric information
problems, how financial and legal institutions work in tandem and apart, and
the differences in mechanism effectiveness in dissimilar economies and
political regimes. 


The law and finance literature highlights the importance of strong financial
and legal institutions in promoting access to finance, economic development
and growth. For example, stronger securities regulatory systems facilitate
initial public offerings (La Porta et al., 1997, 1998, 2006), the spawning
of new entrepreneurial start-ups (Klapper et al., 2006; Cumming and Knill,
2012) and growth in emerging markets (Senbet and Ncube, 1997; Allen et al.,
2005; Bekaert et al., 2005). The success of these corporate endeavors,
however, largely depends on the ability of corporate governance systems to
mitigate agency problems and other governance conflicts specific to the
particular economy (Shleifer and Vishny, 1997; John and Senbet, 1998;
Gompers et al., 2003). Research shows that institutions may not only shape
the nature of dominant governance problems in different countries, but also
influence the efficacy of firm-level governance solutions (Chahine et al.,


Recent work demonstrates that legal institutions by themselves fail to
explain problems with corporate governance and more generally economic
development in many markets around the world, such as China (Allen et al.,
2005), India (Allen et al., 2012) and African countries (Allen et al.,
2013). The success of certain countries, and the continued lack of success
of others, remains largely unexplained on the basis of current
understandings of the difficulties in separating ownership and control. In
countries such as China, which often lack strong Western-style legal
institutions and governance regulations, financial intermediaries establish
other governance mechanisms that facilitate access to finance and economic


Politics potentially distorts the role that legal and financial institutions
play in corporate governance and skew the desired outcomes. Two dimensions
within which politics can enhance or diminish the benefits that legal and
financial institutions can provide in corporate governance around the world
are: 1) the political economy of financial regulation (see, e.g., Rajan and
Zingales, 2003), and 2) the value of political connections (among others,
Fisman, 2001; Faccio et al., 2006; Claessens et al., 2008). Studies document
that firms benefit from political connections, yet the impact on the
international business aspects of corporate governance remains unclear as
does the net or aggregate impact on industry growth.


We invite contributions to this special issue on the role of financial and
legal institutions in corporate governance around the world. Our goal in
this special issue is to integrate the strengths of finance, law, and
international business scholars to gain insights into resolving asymmetric
information and the associated governance problems in international




Submissions are encouraged from scholars that use different theoretical and
empirical approaches to understand corporate governance, financial
intermediation and growth in emerging and developed markets with an emphasis
on finance, law and in politics. While not exhaustive, the following list
suggests possible issues that would be appropriate to address in this
special issue:

.            How do financial and regulatory constraints impact strategy and
growth in private versus public firms across different markets and/or over

.            What influences regulatory competition across various
economies? For instance, given that countries compete on corporate taxes,
listing requirements, governance regulations, and court systems, how does
regulatory competition effect FDI, or more broadly, international business? 

.            How do firms adapt their governance mechanisms and capital
raising strategies in uncertain political and regulatory environments in
different markets?  

.            What legal and/or political factors insulate firms in times of
crisis? Do these differ across foreign and local firms? 

.            What is the role of financial regulation in spurring or
discouraging international business and economic growth in emerging versus
developed markets? 

.            What is the relative impact of political connectedness in
different contexts in conferring special advantages to certain sectors of
the economy or politically favored firms? For example, do political
connections vary in their importance/effectiveness in countries with
different financial and legal institutions?

.            How important are property rights to financing innovation and
international entrepreneurship?  For instance, does the importance of
property rights affect the types of financing activities in emerging and
developed markets? How do differences in property rights influence sources
of funding for innovative activities? 

.            How has the globalization of the IPO market and evolving
regulation of exchanges around the world influenced international business
and economic development in different countries?

.            What patterns exist in disclosure policy, earnings management
and accountability problems around the world and how do these patterns
impact international business?

.            How is the investor landscape changing? For example, what is
the governance impact of private equity investors, hedge funds, sovereign
wealth funds and other financial intermediaries?  

.            Does the political economy of international financial
regulation influence how different firms raise capital in a global economy? 


This Special Issue will provide an opportunity for JIBS to reach out to a
wider audience that has traditionally been associated with the leading
economics and finance journals. By publishing this Special Issue, JIBS will
not only acknowledge the significant contribution of the "law and economics"
perspective to international business research, but it will also send a
strong signal that the journal wants to be an outlet of choice for top
scholars working in the international economics, finance and comparative law



Submission Process

All manuscripts will be reviewed as a cohort for this special issue.
Manuscripts must be submitted in the window between August 17, 2015, and
August 31, 2015, at All submissions
will go through the JIBS regular double-blind review process and follow the
standard norms and processes. 


For more information about this call for papers, please contact the Special
Issue Editors or the JIBS Managing Editor ([log in to unmask]). 



Cass Business School Workshop: Emerging Markets International Business

Cass Business School, in cooperation with JIBS, is pleased to host an
international research workshop on "The Role of Financial and Legal
Institutions in Corporate Governance" in February 2016, in conjunction with
this special issue.  The workshop will provide an opportunity for authors
whose work has been shortlisted for the JIBS Special Issue.  Experienced and
distinguished scholars will serve as discussants to facilitate the
development of the papers. There will be scholars interested in attending as
general participants.  


Details on the workshop will be forthcoming in 2015.




Allen, F, Carletti, E, Cull, R, Qian, J, Senbet, L, & Valenzuela, P. 2013,
Resolving the African Financial Development Gap. NBER volume on African
Development Successes (University of Chicago Press; edited by S. Edwards, S.
Johnson and D. Weil)


Allen, F., Qian, J., & Qian, M. 2005. Law, finance and economic growth in
China. Journal of Financial Economics, 77(1): 57-116.


Allen, F., Chakrabartib, R., Dec, S., Qiand, J., & Qiane, M. 2012. Financing
firms in India. Journal of Financial Intermediation, 21(3): 409-445.


Beck, T. and R. Levine, 2008. Legal Institutions and Financial Development,
Handbook of New Institutional Economics, Springer, Berlin.


Bekaert, G., Harvey, C. & Lundblad. C. 2005. Does financial liberalization
spur growth? Journal of Financial Economics 77: 3-55.


Chahine S, Arthurs J, Filatotchev I., Hoskisson R 2012.  The effects of
venture capital syndicate diversity on earnings management and performance
of IPOs in the US and UK: An institutional perspective.  Journal of
Corporate Finance, 18(1):179-192.


Claessens, S., Feijen, E. & Laeven, L. 2008. Political connections and
preferential access to finance: The role of campaign contributions. Journal
of Financial Economics 88: 554-580.


Coffee, J., 2002, Understanding Enron: It's about the gatekeepers, stupid,
The Business Lawyer 57: 1403-1420.


Cumming, D. & Knill, A. 2012. Disclosure, venture capital and
entrepreneurial spawning. Journal of International Business Studies 43(6):


Faccio, M., Masulis, R. & McConnell, J. 2006. Political connections and
corporate bailouts. The Journal of Finance 61: 2597-2635.


Fisman, R. 2001. Estimating the value of political connections. American
Economic Review: 1095-1102.


Gompers, P., Ishii, L.J. & Metrick, A. 2003. Corporate governance and equity
prices. Quarterly Journal of Economics 118: 107.


John, K., & Senbet, L. 1998. Corporate governance and board effectiveness.
Journal of Banking and Finance 22: 371-403.


Klapper, L., Laeven, L., & Rajan, R., 2006. Entry regulation as a barrier to
entrepreneurship. Journal of Financial Economics 82:3, pp. 591-629, 2006.


La Porta, R.; F. Lopez-De-Silanes; A. Shleifer & Vishny, R. 1997. Legal
determinants of external finance. The Journal of Finance LII: 1131-1150.


La Porta, R., Lopez-de-Silanes, F., Shleifer, A., & Vishny, R. 1998. Law and
finance. Journal of Political Economy, 106(6): 1113-1155.


La Porta, R., Lopez-de-Silanes, F., & Shleifer, A. 2006. What works in
securities laws? The Journal of Finance, 61(1): 1-32.

Rajan, R. & Zingales, L. 2003. The great reversals: the politics of
financial development in the twentieth century. Journal of Financial
Economics 69: 5-50.

Senbet, L. & Ncube, M. 1997. Financial regulation and liberalization in
Africa under incentive problems and asymmetric information. Journal of
African Economies, 6 (1): 29-88.  

Shleifer, A. & Vishny, R. 1997. A survey of corporate governance. The
Journal of Finance 52: 737-783.



Special Issue Editors

Douglas Cumming, J.D., Ph.D., CFA, is a Professor of Finance and
Entrepreneurship and the Ontario Research Chair at the Schulich School of
Business, York University, Canada. He teaches the MBA course "Venture
Capital and Private Equity".  His research interests include venture
capital, private equity, hedge funds, mutual funds, entrepreneurship, and
law and finance.  He is a Co-Editor of Entrepreneurship Theory and Practice
and Finance Research Letters, and has been a guest editor for 12 special
issues of top journals.  He has published over 110 articles in leading
refereed academic journals in finance, management, and law and economics,
such as the Academy of Management Journal, Journal of Financial Economics,
Review of Financial Studies, Journal of International Business Studies and
the Journal of Empirical Legal Studies. He has received a number of academic
best paper awards, such at the Ido Sarnat Best Paper Award from the Journal
of Banking and Finance, and a best paper award from the Bank of Canada.  He
is the coauthor of Venture Capital and Private Equity Contracting (Elsevier
Academic Press, 2nd Edition, 2013), and Hedge Fund Structure, Regulation and
Performance around the World (Oxford University Press, 2013).  He is the
Editor of the Oxford Handbook of Entrepreneurial Finance (Oxford University
Press, 2013), the Oxford Handbook of Private Equity (Oxford University
Press, 2013), and the Oxford Handbook of Venture Capital (Oxford University
Press, 2013).  His work has been reviewed in numerous media outlets,
including The Economist, The New York Times, Canadian Business, the National
Post, and The New Yorker.  He is a research associate with a number of
institutions around the world, including Capital Markets CRC (Sydney),
Cambridge University ESRC Center for Business Research (Cambridge UK), and
the Center for Financial Studies (Frankfurt). Also, he has consulted for a
variety of governmental and private organizations in Australasia, Europe,
and North America.  


Igor Filatotchev is Professor of Corporate Governance and Strategy and
Associate Dean at Cass Business School, City University London, and Director
of Centre for Research on Corporate Governance at Cass. He is also a
Visiting Professor at Vienna University of Economics and Business. He earned
his PhD in Economics from the Institute of World Economy and International
Relations (Moscow, the Russian Federation). His research interests are
focused on corporate governance effects on entrepreneurship and strategic
decisions;  sociology of capital markets. Key research programmes currently
in progress include analysis of resource and strategy roles of corporate
governance; corporate governance life-cycle; and a knowledge-based view on
governance development in entrepreneurial firms and IPOs. He has published
more than one hundred refereed academic papers, in addition to numerous
books and book chapters, in the fields of corporate governance,
entrepreneurship and strategy including publications in leading academic
journals such as Academy of Management Journal, Academy of Management
Perspectives, Strategic Management Journal, Journal of International
Business Studies, Organization Science, California Management Review,
Journal of Management Studies and Journal of Management. Most recently he
edited "Corporate Governance and the Business Life-cycle" (2010), London,
New York: Edward Elgar, and co-edited "The Oxford Handbook of Corporate
Governance" (2013), Oxford: OUP. He is an Associate Editor of Journal of
Management Studies. Before joining JMS editorial team he was an Associate
Editor of Corporate Governance: An International Review.


April Knill, Ph.D., is the Gene Taylor/Bank of America Professor of Finance
at Florida State University. Before joining Florida State University, she
was a consultant for the Development Research Group at the World Bank in
Washington, DC. Her research interests include international finance,
venture capital, and the intersection between law, finance and politics. She
has published in journals such as Journal of Business, Journal of
International Business Studies, Journal of Corporate Finance, Journal of
Financial Intermediation, Journal of Comparative Economics and Financial
Management. She has received the Dean's Emerging Scholar Award as well as
the Center for International Business Education & Research and Financial
Management Association Award for the Best Dissertation in International


Lemma W. Senbet is the Executive Director of African Economic Research
Consortium ( <> ) and on leave
from the University of Maryland as the William E. Mayer Chair Professor of
Finance. Prior to Maryland and AERC, Lemma Senbet was a distinguished
professor at the University of Wisconsin-Madison and held the Charles
Albright Endowed Chair. Professor Senbet has achieved global recognition for
his extensive and widely cited contributions to corporate and international
finance, which have appeared in such premier journals as Journal of Finance,
Review of Financial Studies, and Journal of Business.  He has received
numerous recognitions for his impact on the Finance profession. He has been
elected twice as director of the American Finance Association and is a past
president of the Western Finance Association. In 2000, he was inducted into
the Financial Economists Roundtable, a distinguished group of world-wide
financial economists who have made significant contributions to finance and
apply research to current policy debates. In 2006, Professor was inducted
Fellow of the Financial Management Association International in recognition
of his career-long distinguished scholarship. In 2005, Prof Senbet was
awarded an honorary doctorate by Addis Ababa University, Ethiopia's flagship
university and his alma mater. Additional professional recognitions for
Professor Senbet came from editorial appointments.  He has been appointed to
over a dozen journal editorial boards, including extended tenures with the
Journal of Finance (12 yrs), Journal of Financial and Quantitative Analysis
(6 yrs), and Financial Management (18 yrs).   In 1999 he was named executive
editor of FM and served two terms until 2005. In 2006 he was named Editor
(Finance), JIBS, and he served five years. Prof Senbet has supervised
numerous doctoral students who have gone on to become professors at leading
institutions, such as Carnegie Mellon, Dartmouth, Vanderbilt, Minnesota,
Florida, etc. Two of his former doctoral students are now Dean at Carnegie
Mellon and Chief Economist of the US Securities and Exchange Commission,
respectively. Prof Senbet has advised the World Bank, the IMF, the UN,
African Development Bank, and various governmental and private agencies in
USA, Canada, and Africa on issues relating to financial sector reforms and
capital market development. Regarding his role in the US financial industry,
Prof Senbet was a director of Fotris Funds and is currently an independent
director for the Hartford Funds. 


David M. Reeb holds the Mr. and Mrs. Lin Jo Yan Professorship of Banking and
Finance and is a Professor in the Department of Finance at National
University of Singapore (NUS) Business School. He also serves as an Editor
at the Journal of International Business Studies, a Senior Fellow of the
Asian Bureau of Finance and Economic Research (ABFER), and the Director of
Business Doctoral Programs in NUS Business School. Dr. Reeb's research
focuses on corporate finance but also encompasses financial disclosure
choices and delves into international business. His most recent publication
documents how symptoms of insider trading increase after regulators, such as
the Federal Reserve or the FDA, gain access to private information about the
firm. Dr. Reeb's research appears in the most influential academic journals
in accounting, finance, law, and management (Journal of Finance, Journal of
Financial Economics, Journal of Accounting and Economics, Accounting Review,
Administrative Science Quarterly, Journal of Law and Economics, and the
Journal of International Business Studies). This research generates
thousands of citations, leading to features in the Wall Street Journal,
BusinessWeek, The Economist, Forbes, the Financial Times, the International
Herald Tribune, Inc Magazine, SmartMoney, MSNBC, CNN, Bloomberg TV, and
several other major newspapers and business magazines in the US, Canada,
Europe, Australia and Asia. 




Anne Hoekman

Managing Editor, Journal of International Business Studies


JIBS Editorial Office

Academy of International Business

Michigan State University

Tel: +1-517-481-3518

Fax: +1-517-432-1009

Email: [log in to unmask]



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