The impact of corporate governance regulations on delistings in Europe and North America

Abstract

Within the last decade, corporate governance regulations have been amended and restructured in order to further protect the investor from market abuse. Such regulation can have secondary effects upon the financial market, apart from its principal objective of protecting the investor. This study attempts to determine whether a relationship exists between corporate governance policies and delistings in European Stock Exchanges and American Stock Exchanges from 2011 to 2020. The aim of this study is to determine whether a relationship exists between corporate governance policies and delistings within the European Stock Exchanges and the American Stock Exchanges from 2011 to 2020. This is done through the implementation of a regression analysis. Two sets of null hypothesis and alternative hypothesis were tested, and the results concluded that there is a statistical significance between the value of WGI and the number of delistings, suggesting that the level of corporate governance within a country set by the regulations impacts the number of delistings in that same country. The second hypothesis test examined that the overall regression model is statistically significant.