Popadak (2013)

Popadak, Jillian. “A Corporate Culture Channel: How Increased Shareholder Governance Reduces Firm Value.” Working paper (Fuqua School of Business), October 25, 2013.

From the author’s abstract: “By quantifying culture and using a regression discontinuity strategy, I demonstrate stronger governance significantly changes culture: it increases results-orientation but decreases customer-focus, integrity, and collaboration. Shareholders initially realize financial gains from stronger governance: increases in sales, profitability, and payout occur. Over time, however, intangible assets associated with culture deteriorate, offsetting the gains. These findings support multitasking theory where stronger governance incentivizes focus on easy-to-observe benchmarks rather than harder-to-measure intangibles.”

Link: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2345384