The Efficient Management of Shareholder Value and Stakeholder Theory: An Analysis of Emerging Market Economies

Purpose – The aim of this paper is to examine the relationship of the efficient management of shareholder value as the main objective of corporate governance systems with stakeholder theory.

Design/Methodology – The study uses data from 29 emerging market economies from 1997 to 2006. In order to control possible endogeneity issue, generalized two-stage least squares (G2SLS) and generalized method of moments (GMM) estimation techniques were conducted using country-level panel data.

Findings – The results provide evidence that the efficient management of shareholder value is strongly associated with managers' credibility, social responsibility, employment, and customer satisfaction, suggesting that emerging market economies should consider the interests of stakeholders for the efficient management of shareholder value.

Originality/Value – This is the first study of its kind that attempts to explore the association of the efficient management of shareholder value with country-level determinants of stakeholder theory.

Research Limitations/Implications – The lack of sufficient data is a major problem in international studies. This study also has some limitations in this respect as some emerging economies have not been included in the sample.