Conclusions and Outlook
Corporate Governance in Germany has attracted a lot of attention over the last years. Prominent surveys among institutional investors have shown that they are willing to pay significant premiums for well-governed companies, and that Corporate Governance practices are at least important as financial indicators when evaluating investment decisions. While the relationship between legal Governance variables and firm performance has been analyzed in numerous cross-country studies, little is known about how a whole range of non-legal firm-specific Governance mechanisms affects the required return on equity within a single jurisdiction.
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