Behind broad corporate governance aggregates: A first look at single provisions of the German corporate governance code

Abstract

This study contributes to the emerging research that analyzes the relation between performance and single components of broad corporate governance aggregates, such as governance codes and ratings. Available research is confined to the U.S., Japan, and emerging markets. We enlarge the geographical scope to the German Corporate Governance Code (GCGC). For a sample of 100 large listed German stock corporations, compliance with the GCGC at large is significantly associated only with one of our performance measures (Tobin's q); this connection is negative. Individual analysis of eleven GCGC recommendations reveals that for three of them, association with all performance measures is insignificant. Four (four) components are significantly positively (negatively) connected with at least one performance measure.