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Regression Analysis and Governance

  • Anju Seth
  • Stephen Bowden
Chapter

Abstract

This paper explores the use of regression analysis in conducting research on corporate governance. We highlight that combinations of governance mechanisms together act to mitigate the shareholder-manager agency problem, and examine the implications of this idea for designing empirical research on corporate governance using regression models. We outline the consequences of the omitted variable problem that arises if linkages between governance mechanisms are ignored. We describe two research studies to illustrate how linear regression and logistic regression may be used to examine the complex interlinkages among multiple governance mechanisms. These studies demonstrate approaches to model specification issues that arise in governance research, and also highlight how research designs may be constructed to avoid violation of important assumptions of the regression model.

Keywords

Corporate Governance Ownership Structure Governance Mechanism Free Cash Flow Ownership Concentration 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.

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Copyright information

© Springer Science+Business Media Dordrecht 1997

Authors and Affiliations

  • Anju Seth
    • 1
  • Stephen Bowden
    • 1
  1. 1.College of Commerce and Business AdministrationUniversity of Illinois at Urbana-ChampaignUSA

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