The Interaction between Country-Level and Firm-Level Corporate Governance
Christopher von Koch, Ola Nilsson, Micael Jönsson, Karin Jonnergård

Abstract
In this exploratory study, we analyse the relationship between country-level corporate governance and firm-level corporate governance. Although prior research has shown that corporate governance at both levels impacts firm performance, findings have been inconsistent as to whether these levels are complements to or substitutes for each other. By using two extensive datasets this study is able two bring knowledge of the interaction between the levels. The findings reveal that there exists a positive relationship between the two levels of corporate governance. However, there a several dimensions to consider when analyzing the interaction. First of all, different categories of protection within the different level have different importance for the relationship and in what direction this aims. Second, this also depends on the legal context where the common law countries target protection against management abuse and the civil law countries target protection against blockholding shareholder abuse. The main conclusion from this study is that corporate governance at the country level and corporate governance at the firm level are complementary but the analysis of corporate governance should gain of analysing the concept considering both level and especially nuances of the levels.

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