Advancing Corporate Governance Research

This chapter examines the relationship between national cultural values and corporate governance, challenging the established perspective that views countries as uniform entities represented by national averages. As an alternative perspective, here we employ archetypal analysis to capture micro-level heterogeneity in secular and emancipative values within 75 countries. Drawing from the World Economic Forum's Global Competitiveness Report and the World Bank's Worldwide Governance Indicators, and using necessary conditions analysis and generalized linear models, the authors find that, in the presence of institutional and GDP controls, the alternative archetypal perspective offers a stronger and more refined interpretation of the association between cultural values and corporate governance than the traditional approach. A conclusion that holds for the two alternative definitions of corporate governance they tested, broadly defined to include elements of social responsibility, and narrowly defined to focus on the maximization of shareholder value.