ABSTRACT
If the perceived quality of corporate governance in a country is high, capital will generally be attracted more easily and in the converse case the opposite results ensue (Rajagopalan and Zhang, 2008). The quality of corporate governance and institutions in developing and emerging markets (DEMs) is lower compared to developed economies with mature institutions and markets (Chakrabarty and Bass, 2014). In turn, DEMs have a pent-up demand for capital, whilst investors are hungry for new global opportunities in soft markets (Sidaq, 2014). Consequently, DEMs institute corporate governance reforms and institution building initiatives following privatization programmes, usually demanded or supported by active institutional investors and shareholder’s groups desirous of preventing expropriatory behaviour by officers of companies (La Porta et al., 2000). There is usually pushback by owners of sizeable/family businesses who control management as well as politicians and bureaucrats benefitting from rents derived from their close association with them (Biswas, 2015). Reform is also instigated by international financial institutions (Biswas, 2015) seeking to facilitate clement business environments for global capitalism.
