Corporate governance law effect in Greece

Abstract

PurposeLegislators legislate, but how feasible and effective the implementation and enforcement of these laws are and how congruent with the countries characteristics, is under doubt. The paper seeks to argue that the Greek law on corporate governance (CG) had no effect on the fundamental elements of the corporate environment.Design/methodology/approachSeven hypotheses are tested using three different econometric methodologies (panel data, probit, and ordinal probit regression).FindingsThe paper pinpoints the legal disarrays and their impact on the firm and argues that there is a need for a new set of principles and laws that focus on the real issues of CG rather than the size, structure and leadership of the administrating bodies or the disclosure mechanisms.Research limitations/implicationsThe data used have been collected from the annual reports and not from questionnaires. Furthermore, there is no methodology to integrate all seven models to a structured or nested model.Practical implicationsThe study provides evidence that there is a need for a different set of provisions than the ones in the Anglo‐Saxon countries.Originality/valueThe paper uses a variety of methodologies and tests seven hypotheses. It takes a more holistic approach.