DP3626 Does the New Economy Need New Governance? Ownership, Knowledge and Performance

Author(s): David B Audretsch, Erik Lehmann
Publication Date: November 2002
Keyword(s): corporate governance, entrepreneurship, firm survival, new economy
JEL(s): C14, G32, L11, M13
Programme Areas: Industrial Organization
Link to this Page: cepr.org/active/publications/discussion_papers/dp.php?dpno=3626

We study the implications of ownership and its induced incentives on firm performance in the ?New Economy?. Instead of traditional performance we use firm survival on the stock market as the performance indicator. Using a unique data set of all 341 firms listed on the Neuer Markt, the German counterpart of the NASDAQ, our results differ from studies on more traditional firms. Ownership by CEOs has no influence on firm survival when introducing measurements of human capital and intellectual property rights. This confirms assumptions that firms in the ?New Economy? differ also in their governance structure from traditional firms.