The relationship between corporate governance and firm financial performance: an empirical investigation of an emerging market

2021 ◽  
Vol 15 (2) ◽  
pp. 215
Author(s):  
Qazi Awais Amin ◽  
Stuart Sean Farquhar
Keyword(s):  
Corporate Governance ◽  
Financial Performance ◽  
Empirical Investigation ◽  
Emerging Market ◽  
Firm Financial Performance ◽  
The Relationship

scholarly journals Conceptual Model for Effective Board Composition in the Context of Emerging Markets

2015 ◽  
Vol 8 (1) ◽  
pp. 38
Author(s):  
Madi Almadi
Keyword(s):  
Corporate Governance ◽  
Emerging Markets ◽  
Financial Performance ◽  
Management Practices ◽  
Social Economic ◽  
Board Composition ◽  
Firm Financial Performance ◽  
The Impact ◽  
The Relationship ◽  
Practical Implications

The impact of context has little or no consideration in the mainstream corporate governance literature. The purpose of this paper is to consider social, economic, and political elements of the emerging Saudi Arabian market when developing a multi-theoretical model about the relationship between board composition and financial performance.<strong> </strong>The paper attempts to conceptually inform the conversation about context with regard to board composition and firm financial performance in emerging markets. In particular, it discusses these theoretical feedback loops in conjunction with a proposed research agenda for the field.<strong> </strong>The paper proposes shifting the focus of corporate governance in emerging markets from relying on the predominant Western corporate governance theories to the alignment of those theories with considerations on emerging markets context. Such an approach involves significant implications for corporate governance theories and management practices. The paper describes the conditions in which certain formation of board of directors is composed in the Saudi Arabia may generate a competitive advantage. The consideration of emerging markets context can have implications for society as it may influence firms and governments to improve corporate governance standards and practices<strong> </strong>A literature gap in the corporate governance literature identified in this paper holds theoretical and practical implications. This research will enable comparative studies with other emerging markets, and will provide a conceptual benchmark for future corporate governance research.

scholarly journals Board Structure and Firm Performance:Evidence from Emerging Market

2020 ◽  
Vol 8 (5) ◽  
pp. 2305-2311
Keyword(s):  
Corporate Governance ◽  
Firm Performance ◽  
Financial Performance ◽  
Corporate Performance ◽  
Emerging Market ◽  
Small Sample ◽  
Independent Director ◽  
Board Structure ◽  
Board Size ◽  
Firm Financial Performance

This paper fulfils the purpose by studying the effect of corporate board structure i.e., board size and independent director on firm financial performance for selected focused and diversified Indian companies. This study analyses the corporate governance structure of 76 Indian companies (60 focused and 16 diversified companies) listed on the BSE-Sensex for ten years from the year 2007-2016 using panel data analysis. The empirical findings showed a positive relationship of board size with firm performance and significant negative association of independent director with the corporate performance of focused Indian firms, while in the diversified Indian firm, board size found to be positively related to financial performance and independent director found to be negatively related to corporate performance. The result has shown that board structure has seemed to be significant in listed focused firm with firm performance while board structure of diversified firm seems to be insignificant with firm performance, it might be because of small sample size and dynamics of an emerging economy in India which is different from the developed economies of the world. This study implied that in emerging or developing economy like India, lower independent director usually boost company value, and adequate board size will significantly impact on firm performance both in case of focused and diversified firms. This research paper contribute and fill existing gap in literature on corporate governance by examining and establishing relation between firm performance and board structure with focused and diversified Indian firms.

Corporate social responsibility and future financial performance

2018 ◽  
Vol 13 (3) ◽  
pp. 351-371 ◽  
Author(s):  
Mahdi Salehi ◽  
Mahmoud Lari DashtBayaz ◽  
Sohila Khorashadizadeh
Keyword(s):  
Corporate Social Responsibility ◽  
Social Responsibility ◽  
Financial Performance ◽  
Emerging Market ◽  
Return On Assets ◽  
Content Type ◽  
Firm Financial Performance ◽  
The Future ◽  
Corporate Social ◽  
The Relationship

Purpose The purpose of this paper is to investigate the relationship between corporate social responsibility (CSR) expenditures and firm financial performance in an emerging market. Design/methodology/approach The authors examine the hypotheses by performing panel data analysis on a sample of 159 companies listed on the Tehran Stock Exchange during 2010–2015. Findings The findings suggest that the investment in CSR initiatives is significantly and positively associated with firm financial performance as proxied by changes in return on assets. Moreover, the findings confirm a positive and significant association between CSR expenditures and firm financial performance as proxied by both the future changes in return on assets and the future changes in operating cash flows scaled by total assets. Originality/value The present study has examined the relationship between CSR and firm financial performance in a country where, to the authors’ knowledge as in most other developing markets, such a relationship has not been a subject of empirical research. Besides, the use of a three-dimensional measure of financial performance, primarily considering research undertaken in an emerging market, as a valuable contribution may be observed.

Corporate governance guidelines compliance and firm financial performance

2016 ◽  
Vol 31 (8/9) ◽  
pp. 891-914 ◽  
Author(s):  
Erick Rading Outa ◽  
Nelson M. Waweru
Keyword(s):  
Corporate Governance ◽  
Life Cycle ◽  
Firm Performance ◽  
Financial Performance ◽  
Firm Value ◽  
Design Methodology ◽  
Content Type ◽  
Firm Financial Performance ◽  
The Impact ◽  
The Relationship

Purpose This paper aims to examine the impact of compliance with corporate governance (CG) guidelines during the period 2002-2014 on firm financial performance and firm value of Kenyan-listed companies. Design/methodology/approach Using panel data of 520-firm year’s observations between 2005 and 2014, the authors test the hypothesis that compliance with CG guidelines issued in 2002 by Capital Markets Authority (CMA) improved firm financial performance and firm value. Findings Compliance with CG Index which is an aggregate of all the CG guidelines is positively and significantly related to firm performance and firm value. Board evaluation is also positively and significantly related to firm performance. The findings suggest that CG guidelines are associated with firm financial performance and firm value. Originality/value The authors provide evidence on the relationship between CG practices and firm financial performance and firm value in Kenya. Second, the authors provide evidence on board evaluation which has not been tested before in a “comply or explain” environment. Finally, they evaluate how CMA 2002 CG guidelines steered firm financial performance and firm value over its life cycle from 2002 to 2014. These results are important to CMA and other CG regulators and boards in their efforts to improve CG practices in the region.

scholarly journals The moderating role of director’s financial expertise in political connections and corporate financial performance in Pakistan

Accounting ◽  
2021 ◽  
pp. 865-874
Author(s):  
Murtaza Masud Niazi ◽  
Zaleha Othman ◽  
Sitraselvi Chandren
Keyword(s):  
Firm Performance ◽  
Financial Performance ◽  
Emerging Market ◽  
Political Influence ◽  
Political Connections ◽  
Political Connection ◽  
Firm Financial Performance ◽  
Financial Expertise ◽  
The Impact ◽  
The Relationship

Prior theoretical and empirical studies have suggested that political influence affects the application of corporate governance and firm performance enormously. However, several fundamental questions remain to be answered. To fill this knowledge gap,the study's main objectives are examining the direct impact of political connection on firm financial performance in Pakistani non-financial listed companies and the moderating effect of director's financial expertise on political connections and firm financial performance. The study utilised panel data of 220 firms from 2008 to 2017 and used panel corrected standard error regression analysis. The results show that political connection negatively impacted firm financial performance, and director financial expertise as a moderator strengthened the relationship between political connections and firm financial performance. This study's results supported political economy theory in that weak judicial systems and unstable political systems have immense effects on investor’s rights. The study contributes to extending the existing literature on political connection by providing evidence of the impact of politically connected firms on firm performance in an emerging market. The study also deliberates on how the director’s financial expertise contributes towards the relationship. The findings could be generalised to other countries with similar degrees of development and culture.

scholarly journals The relationship between board characteristics and firm financial performance in Malaysia

2016 ◽  
Vol 14 (1) ◽  
pp. 259-268 ◽  
Author(s):  
Sin Huei Ng ◽  
Boon Heng Teh ◽  
Tze San Ong ◽  
Wei Ni Soh
Keyword(s):  
Corporate Governance ◽  
Financial Performance ◽  
Voluntary Disclosure ◽  
Random Effect ◽  
Board Size ◽  
Return On Equity ◽  
External Auditors ◽  
Board Characteristics ◽  
Firm Financial Performance ◽  
The Relationship

Corporate governance has drawn attention of investors and government after the incidence of financial crisis world- wide since the late 90’s. Despite that reforms of corporate governance have been in place in Malaysia, voluntary disclosure of corporate governance has yet to proof its impact on the financial performance of the companies. This study examines the relationship between corporate governance attributes and firm financial performance in Malaysia. The relationship between board characteristics (board tenure, board size and CEO duality) were analyzed to investigate their correlation with firm financial performances. A total of 100 public listed companies were randomly selected from Bursa Malaysia for the year 2009 to 2013. Random effect panel data regression was obtained by using Stata. This study finds that board size, board tenure were significant to Return on Equity (ROE) and Return on Assets (ROA). However, firm size has no significant relationship with firm financial performance. It is recommended that apart from including more variables as controlling effects on firm financial performance and examining few industries as sample, it is also good to examine the correlation between board characteristics and corporate governance variables (foreign listings, equity analysis, external auditors, leverage ratios, dividend policy, etc.) on one hand, and ownership structures on the other hand, that have significant impact on firm financial performance.

Corporate Governance, Political Connections and Firm Performance: The Role of Political Regimes and Size

2020 ◽  
pp. 097215091987652
Author(s):  
Sabeeh Ullah ◽  
Yasir Kamal
Keyword(s):  
Corporate Governance ◽  
Firm Performance ◽  
Financial Performance ◽  
Performance Measure ◽  
Political Connections ◽  
Executive Directors ◽  
Firm Financial Performance ◽  
Democratic Regimes ◽  
The Relationship

This article empirically examines the relationship between corporate governance and firm financial performance, and the interplay of political connections of 150 non-financial listed Pakistani firms ranging from 2001 to 2014. Generally, and consistent with the prior researchers, we reported that corporate governance is an essential predictor of firm financial performance in Pakistan. Moreover, the results indicate that political connections substitute non-executive directors (NXD), executive directors (EXD) and board meetings (BM) in terms of firm performance measure return on asset (ROA), whereas NXD and EXD complement in terms of Tobin’s Q. We also found some variations in these effects, when moving from large to small size sampled firms and dictator to democratic regimes. Theoretically, our results support the Agency, Resource Dependency and Stewardship theories.

scholarly journals Corporate ethical reporting and financial performance: Evidence from the emerging market.

2017 ◽  
Vol 7 (4) ◽  
pp. 14-22
Author(s):  
Uwalomwa Uwuigbe ◽  
Jinadu Olugbenga ◽  
Olubukola Ranti Uwuigbe ◽  
Daramola Sunday Peters ◽  
Adegbola Otekunrin
Keyword(s):  
Corporate Governance ◽  
Financial Performance ◽  
Ethical Issues ◽  
Emerging Market ◽  
Pearson Correlation ◽  
Least Square ◽  
Annual Reports ◽  
Listed Firms ◽  
The Impact ◽  
The Relationship

This paper examines the degree of comprehensiveness of ethical reporting in annual reports of listed firms in Nigeria. It also looks at the relationship between the extent of corporate ethical reporting and financial performance of the listed firms. In addition, it examines the impact of corporate governance on the financial performance of the listed firms. The study utilises the corporate annual reports for the period 2010-2014 as our main source of secondary data, while the content analysis technique is used to elicit data from the corporate annual report. In testing the research hypotheses, the study adopts the use of descriptive statistics, Pearson correlation and panel least square regression method to analyse the degree of comprehensiveness and the relationship between corporate ethical reporting and financial performance of the listed firms. Findings from the study show that there is lack of comprehensiveness of corporate ethical reporting in the selected industries. In addition, the study observed that a significant relationship exists between corporate ethical reporting and financial performance. Also, the study observed that the relationship between corporate governance and financial performance is not significant. The study recommends the need for a stand-alone report for corporate ethical issues in annual reports of companies in Nigeria.

IMPLEMENTASI KINERJA KEUANGAN TERHADAP NILAI SPIRITUALITAS PRIBADI

2012 ◽  
Vol 16 (3) ◽  
pp. 332
Author(s):  
Whedy Prasetyo
Keyword(s):  
Corporate Governance ◽  
Corporate Social Responsibility ◽  
Social Responsibility ◽  
Financial Performance ◽  
Annual Report ◽  
Main Concern ◽  
Good Corporate Governance ◽  
Corporate Social ◽  
The Relationship ◽  
Personal Spirituality

Development of financial performance in the application of Good Corporate Governance and Corporate Social Responsibility which affects the values of honesty private individuals, in order to be able to run the accountability, value for money, fairness in financial management, transparency, control, and free of conflicts of interest (independence). The main concern in this study is focused on achieving value personal spirituality through the financial performance and capabilities of Good Corporate Governance (GCG) and Corporate Social Responsibility (CSR) in moderating the relationship with the financial performance of value personal spirituality. This study is a descriptive verifikatif. The unit of analysis in this study was 15 companies in Indonesia with a policy that has been applied through the concept since January of 2008 until now, with the support of the annual report of the company, the company's financial statements, company reports to the disclosure of Good Corporate Governance and Corporate Social Responsibility in the annual report. Overall reports published successively during the years 2008-2011. The results of this study indicate financial performance affects the value of personal spirituality, and for variable GCG obtained results that could moderate the relationship of financial performance to the value of personal spirituality. But for the disclosure of CSR variables obtained results can’t moderate the relationship with the financial performance of personal spirituality.

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