Comparative Corporate Governance: Progress and Prospect

International organizations such as the G20 and OECD have been attempting to promote the adoption of the best corporate governance mechanisms across countries.As a result,many scholars have predicted that the corporate governance of companies in different countries would increasingly become similar.However,significant differences still exist in corporate governance among firms from different countries.Over the past three decades,scholars have attempted to examine the origins of these differences through large-sample cross-country comparative studies,which is defined as comparative corporate governance.However,the challenges of conducting solid comparative corporate governance research are substantial.Limited consensus exists over what factors best explain the diversity of corporate governance across countries.Moreover,few articles provide adequate attention to cross-country comparability testing,raising the concern that the reported findings may be spurious.In light of these opportunities and challenges,we systematically review comparative corporate governance studies published in top journals both domestically and internationally from 1990 to 2022.In this review,we not only draw on the available literature from international business (IB) and management but also borrow from comparative research in neighboring disciplines such as political science and sociology.The objectives of this review are three-fold:① take stock of the growing literature on comparative corporate governance by adapting Kohn’s typology of models of comparative research; ② provide a critical assessment of the literature and identify the gaps and problems in the extant studies; ③ set an agenda for future comparative corporate governance research.Drawing upon the cross-national comparative research framework proposed by sociologist Kohn,we categorize comparative corporate governance research into four domains:nation as the object of study,nation as the context of study,nation as the unit of analysis,and nation as part of a larger system.Firstly,13 studies hold a nation as the object of study.In this type of comparative corporate governance research,the authors’ primary interest lies in corporate governance in the particular countries studied.It is often descriptive,seeking to describe the similarities and/or differences in corporate governance in different nations.Secondly,18 studies have treated a nation as the context of the study.In such studies,the authors are primarily interested in examining whether and how national context is related to corporate governance or the relationship between corporate governance and its antecedents/consequences.Thirdly,research treating a nation as the unit of analysis has flourished in the comparative corporate governance field.In this type of research,the pivotal distinguishing national characteristics become variables in the analysis.Research that treats nations as units of analysis is typically labeled as “large-N comparative analysis”.Scholars pursuing this line of research are less interested in the unique context of the nations under study and more interested in the abstract relationships among quantifiable national characteristics.Finally,only four studies have treated nations as part of a larger international system.In these studies,scholars interpret a nation’s corporate governance as influenced by transnational systems or processes. Based on our review of a sample of 115 papers,we identified significant gaps and areas of concern that limit the impact and rigor of this line of research.Firstly,a deep understanding of the national context of corporate governance has been limited,which deserves further exploration.Secondly,scholars have also not paid enough attention to concept equivalence.Few comparative studies,particularly those treating a nation as the unit of analysis,have offered sufficient discussion of concept equivalence.Thirdly,the current literature has primarily focused on developed countries for comparative analysis,while relatively few studies have focused on emerging economies such as China.In addition,prior studies have adopted different methods and samples,making it difficult to determine whether the differences in corporate governance across countries are caused by variations in national institutions or by methods.Finally,although a number of scholars have effectively demonstrated key shortcomings in the law and finance approach,most scholars have predominantly relied on this approach to conduct comparative corporate governance research. This paper has also proposed five avenues for future research based on the knowledge gaps identified in our critical assessment of the literature.① Scholars should conduct more systematic analyses of national context before translating “nations” into “variables.” Only with a deeper understanding of the national context can the country-level variables extracted from research become more explanatory.② Future research should take advantage of qualitative comparative analysis (QCA) and hierarchical linear modeling (HLM) in conducting comparative corporate governance research.③ Additional effort needs to be made to achieve comparability of concepts to enhance the reliability and validity of research.④ Future studies should present a justification for country selection.Scholars may only select countries to which they have access,which results in an over-representation of developed economies with better access to data on corporate governance.However,any similarities or differences revealed by a comparative corporate governance study may be no more than an artifact of the choice of countries.As a result,country selection must be theoretically justified.Given the significant differences in institutional environments and cultural contexts between emerging markets and developed countries,future research should incorporate emerging markets into the sample.⑤ Comparative corporate governance research can benefit from the integration of theories from different disciplines.Therefore,future research should draw upon insights from other fields such as sociology and political science.