THE EFFECT OF WEAKENING OF CORPORATE GOVERNANCE ON ENTREPRENEURSHIP
DOI:
https://doi.org/10.29121/shodhkosh.v5.i1.2024.5547Keywords:
Corporate Governance, Entrepreneurship, Anti-Takeover LawsAbstract [English]
This paper examines the effect of the weakening of corporate governance on entrepreneurship. The paper argues that weakening corporate governance facilitates the rent extraction by management, increasing the potential benefits of entrepreneurship in the event of success. We hypothesise that this should increase the entry of firms in states with weaker corporate governance provisions. We test this hypothesis using the passage of anti−takeover laws by states that weaken corporate governance by shielding management from hostile takeovers. The preliminary results provided in the paper support this hypothesis.
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