Journal of International Business Studies

, Volume 40, Issue 9, pp 1533–1562

Property rights protection, corporate transparency, and growth


DOI: 10.1057/jibs.2009.58

Cite this article as:
Durnev, A., Errunza, V. & Molchanov, A. J Int Bus Stud (2009) 40: 1533. doi:10.1057/jibs.2009.58


In countries with secure property rights, corporate transparency improves investment efficiency and increases growth by alleviating information asymmetry. However, in countries with insecure property rights, greater transparency can increase the risk of government expropriation. Therefore some firms that would benefit most from transparency cannot take full advantage of it, as they set sub-optimal transparency levels. Using data from 59 industries in 69 countries, we find that in countries with weak property rights protection, industries that would benefit the most from transparency exhibit worse investment efficiency and grow more slowly than industries that can efficiently operate at minimal levels of transparency.


corporate governancepolitical riskbusiness performancefinancial and industrial structure

Copyright information

© Academy of International Business 2009

Authors and Affiliations

  • Art Durnev
    • 1
  • Vihang Errunza
    • 1
  • Alexander Molchanov
    • 2
  1. 1.Desautels Faculty of Management, McGill UniversityMontrealCanada
  2. 2.Department of Economics and FinanceMassey UniversityAucklandNew Zealand