scholarly journals CORPORATE GOVERNANCE AND FIRM VALUE IN EMERGING MARKETS AN EMPIRICAL ANALYSIS OF ADR ISSUING EMERGING MARKET FIRMS

2012 ◽  
Vol 2 (1) ◽  
pp. 38-51 ◽  
Author(s):  
Aysun Ficici ◽  
C. Bulent Aybar
Keyword(s):  
Corporate Governance ◽  
Firm Performance ◽  
Firm Value ◽  
Emerging Market ◽  
Market Value ◽  
Governance Structures ◽  
Market Values ◽  
Good Corporate Governance ◽  
Emerging Market Firms ◽  
The Impact

This study explores the value implications of good corporate governance for a sample of 54 ADR issuing emerging market firms (EMFs) from 9 countries primarily located in the regions of Asia, Eastern Europe and Latin America and the and employs recently constructed company composite corporate governance metric along with some alternative corporate governance measures associated with the origin of the issuing firm. Although the ADR literature primarily focuses on the impact of subscription to US disclosure requirements we contend that company and country specific corporate governance standards play a significant role in the risk reduction and ensuing value capture.  The fundamental inquiry in this study has the following foci: The primary focus is on the impact of corporate governance structures on firm performance as to whether adherence to standards creates market value for ADR issuing EMFs.  Do good corporate governance practices affect the value of EMFs? The secondary focus is concerned with whether the impact of corruption level and legal system in a firm’s home country affect the corporate structures of EMFs thus affecting the market value of firms.  In this study, we utilize Tobin’s q as the measure of firm performance/market value.  Our findings suggest that there is a significant correlation between corporate governance structures of ADR issuing EMFs and their market values and/or performances.  The results also indicate that the level of corruption and legal structures in home countries of EMFs strongly impact the corporate governance structures of these firms and sequentially affect their market values. Therefore, this research further contributes to the scholarly findings and suppositions that corporate structures of firms do create consequences on firm value.

scholarly journals The Influence of Good Corporate Governance and Capital Structure on Firm Value: The Mediation Role of Financial Performance

2020 ◽  
Vol 35 (2) ◽  
pp. 230
Author(s):  
Ridwan Nurazi ◽  
Intan Zoraya ◽  
Akram Harmoni Wiardi
Keyword(s):  
Corporate Governance ◽  
Capital Structure ◽  
Financial Performance ◽  
Firm Value ◽  
Stock Exchange ◽  
Linear Regression Analysis ◽  
Multiple Linear Regression Analysis ◽  
Company Value ◽  
Good Corporate Governance ◽  
The Impact

<pre>The objective of this study is empirically identify the impacts of Good Corporate Governance and capital structure on firm value with financial performance as intervening variable. We operate quantitative approach within the scope of manufacturing company of metal, chemical, and plastic packaging sector which listed in Indonesia Stock Exchange during the 2017-2018 periods as the population. Samples are chosen by purposive sampling method inwhich the company must report the financial statement in a row, obtained 79 observations. The data analysis technique used is financial ratio analysis to determine the condition of the business financial ratios of the variables studied. Data were analyzed using multiple linear regression analysis. The result shows that corporate governance and capital structure influence the firm value, moreover the use of institutional ownership ratio and capital structure will increase the value of the firm. The result also shows that the impact of Corporate governance and capital structure on the company value are mediated by financial performance. It means that the value of the firm can increase if the company able became an effective monitoring tool.</pre>

scholarly journals Does ESG Performance Enhance Firm Value? Evidence from Korea

2018 ◽  
Vol 10 (10) ◽  
pp. 3635 ◽  
Author(s):  
Bohyun Yoon ◽  
Jeong Lee ◽  
Ryan Byun
Keyword(s):  
Corporate Governance ◽  
Firm Value ◽  
Emerging Market ◽  
Market Value ◽  
Governance Structure ◽  
Developed Countries ◽  
Share Prices ◽  
Performance Enhance ◽  
Environmentally Sensitive ◽  
Governance Practice

We analyze whether a firm’s corporate social responsibility (CSR) plays a significant role in promoting its market value in an emerging market, namely Korea. We employ environmental, social, and corporate governance (ESG) scores to evaluate CSR performances and examine their effect on firm valuation. We find that CSR practices positively and significantly affect a firm’s market, in line with previous studies on developed countries. However, its impact on share prices can differ according to firm characteristics. For firms in environmentally sensitive industries, the value-creating effect of CSR is lesser than for firms that do not belong to sensitive industries. Specifically, corporate governance practice negatively influences the firm value of environmentally sensitive firms. Further, governance practice significantly promotes market value only for chaebols, while investors do not significantly value governance practice carried out by other firms. This finding suggests the value-enhancing effects of governance structure reformation in the former. This work mainly contributes to the literature by verifying a positive CSR-valuation relationship in emerging markets, which provides substantial policy and welfare implications in markets where governments play a major role in promoting CSR. A stronger valuation effect of CSR in chaebols may present economic background for the intervention of the Korean government in the reformation of chaebol.

scholarly journals Corporate Social Performance and Firm Performance: Comparative Study among Developed and Emerging Market Firms

2019 ◽  
Vol 12 (1) ◽  
pp. 26 ◽  
Author(s):  
Irene Wei Kiong Ting ◽  
Noor Azlinna Azizan ◽  
Rajesh Kumar Bhaskaran ◽  
Sujit K Sukumaran
Keyword(s):  
Firm Performance ◽  
Best Practice ◽  
Corporate Social Performance ◽  
Social Performance ◽  
Emerging Market ◽  
Valuation Effects ◽  
Thomson Reuters ◽  
Emerging Market Firms ◽  
Corporate Social ◽  
The Impact

This study examines the impact of firms’ environmental, social and governance (ESG) initiatives on financial performance. It also compares the valuation effects of corporate social performance initiatives in developed and emerging market firms. The study was based on ESG ranking scores in the Thomson Reuters database, and the sample comprised 1317 emerging market firms and 3569 developed market firms. In comparison with developed market firms, emerging market firms had higher ESG combined scores, ESG Controversy scores, category scores of resources use, workforce, human rights and corporate social responsibility strategy scores. This study finds that stakeholder initiatives positively impact valuation effects, based on all sample results. Firm-generated controversies may decrease valuation effects in the stock market. Results indicated that ESG initiatives have a significant positive to the firm performance. The presence of independent board members and ownership by investors is a positive determinant for value creation. The adoption of best practice corporate governance principles is an important determinant of the valuation of firms. Firms’ propensity to use defence mechanisms decreases valuation effects. Developed market firms received positive valuation effects due to ESG initiatives.

scholarly journals The Effect of Intangible Assets on Financial Performance, Financial Policies, and Market Value of Technology Firms: A Global Comparative Analysis

2021 ◽  
Vol 12 (1) ◽  
pp. 26
Author(s):  
Muhammad Junaid Qureshi ◽  
Danish Ahmed Siddiqui
Keyword(s):  
Firm Performance ◽  
Financial Performance ◽  
Firm Value ◽  
Structural Equation ◽  
Intangible Assets ◽  
Group Analysis ◽  
Market Value ◽  
Equation Modeling ◽  
Best Interest ◽  
The Impact

Purpose- The purpose of this study is to examine the degree to which intangible assets affect financial performance and policy of the technological sector.Design/methodology/approach- Structural equation modeling analysis was used to ascertain the relationship among intangible assets, firm performance, firm policy, and firm value in the year 2015 to 2018 of 80 companies according to the market capitalization of their respective countries in the technology sector globally. The measures used in this study profitability efficiency, capital structure, dividend policy and market value that is calculated through the proxies ROA, ROE, ROIC, ATO, Net Profit Margin, debt to equity ratio, dividend payout ratio, price-earnings ratio, price to sales and price to book value.Finding- The results from Multi group Analysis (MGA) revealed that there are differences (p < .05) in the significance of the impact of Assets on the criterion variable between a few countries for instance Asset’s impact on ROIC is significantly different between Russia & China and USA.Practical implications- Owners and managers of technological sector global companies must recognize the importance of both the physical capital and the intangible resources to the best interest of the companiesOriginality/value– This is the first paper to examine the impact of intangible assets on firm performance, policies and value through cross country analysis in the technological sector.

scholarly journals The impact of foreign ownership on corporate governance: evidence from an emerging market

2019 ◽  
Vol 16 (2) ◽  
pp. 101-115
Author(s):  
Rawan Shubita ◽  
Moade Fawzi Shubita
Keyword(s):  
Corporate Governance ◽  
Firm Value ◽  
Stock Exchange ◽  
Emerging Market ◽  
Decisive Role ◽  
Foreign Ownership ◽  
Growth Opportunity ◽  
Governance Practices ◽  
Company Growth ◽  
The Impact

This research explores the influence of foreign ownership on non-financial public shareholding firms in the Amman Stock Exchange (ASE). The study involved an investigation into the connection between non-Jordanian ownership and the company growth opportunity, stock liquidity, leverage, dividend policy and business output. The results highlight that foreign ownership can provide improved corporate governance practices by playing a decisive role in increasing the growth opportunity and enhancing the firms’ market valuation, as measured by Tobin’s Q. Moreover, the findings indicate that companies with foreign board membership have better operating performance and higher firm value. The rewards were reaped by foreign investors based on their superior monitoring ability, which affects the decisions made and actions taken by management.

scholarly journals Corporate Governance, Intellectual Capital and Firm Performance

2016 ◽  
Vol 8 (1) ◽  
pp. 17 ◽  
Author(s):  
Abdul Basyith
Keyword(s):  
Corporate Governance ◽  
Firm Performance ◽  
Intellectual Capital ◽  
Stock Exchange ◽  
Developed Countries ◽  
Panel Method ◽  
Current Evidence ◽  
Listed Firms ◽  
Good Corporate Governance ◽  
The Impact

<p>This paper investigates the impact of corporate governance and intellectual capital on firm<br />performance in Indonesian-listed firms. Using a balanced-panel of 120 Indonesian-listed<br />firms, this study employs a balanced panel method, using non linier IV 2SLS and non linier<br />IV-GMM. All variables, apart from commissioners, directors, education and capital<br />employed efficiency exhibit a non significant impact on Tobins’Q, while all variables are<br />statistically non significant for ROA. The findings are less conclusive than that of previous<br />studies in developed countries. This study provides recent evidence for the corporate<br />governance and intellectual capital in affecting firm peformance of listed-firms in Indonesian<br />Stock Exchange. Though most listed-firms in Indonesia is owned by group or family, the<br />appointment should be strictly complied to the regulations set, as current evidence indicates<br />that independent commissioners and directors have no impact on firm performance, hence an<br />awareness of good corporate governance conduct should be massively disseminated.</p>

scholarly journals Pengungkapan Corporate Social Responsibility, Mekanisme Good Corporate Governance dan Nilai Perusahaan

2021 ◽  
Vol 31 (11) ◽  
pp. 2774
Author(s):  
Gusti Ayu Intan Puspita Dewi ◽  
I Dewa Nyoman Badera
Keyword(s):  
Corporate Governance ◽  
Corporate Social Responsibility ◽  
Social Responsibility ◽  
Firm Value ◽  
Linear Regression Analysis ◽  
Institutional Ownership ◽  
Managerial Ownership ◽  
Good Corporate Governance ◽  
Corporate Social ◽  
The Impact

This study aims to examine the effect of corporate social responsibility disclosure and good corporate governance mechanisms on firm value. Elements of the good corporate governance mechanism are proxied into audit committees, independent commissioners, institutional ownership, and managerial ownership. The tests were carried out on mining companies listed on the Indonesia Stock Exchange in 2016-2019. The sample was selected using purposive sampling technique. Data were analyzed using multiple linear regression analysis. The results show that the more companies increase the disclosure of corporate social responsibility, the impact on increasing the value of the company. Maximizing the function of the audit committee, institutional ownership, and managerial ownership can increase firm value. However, maximizing the function of independent commissioners has no effect on increasing firm value. Keywords : Corporate social responsibility; Good corporate governance; Firm Value.

scholarly journals Corporate governance mechanisms and firm performance: evidence from the emerging market following the revised CG code

2019 ◽  
Vol 20 (1) ◽  
pp. 158-174 ◽  
Author(s):  
Yan Wang ◽  
Kaleemullah Abbasi ◽  
Bola Babajide ◽  
Kemi C. Yekini
Keyword(s):  
Corporate Governance ◽  
Firm Performance ◽  
Performance Indicators ◽  
Fixed Effects ◽  
Emerging Market ◽  
Board Independence ◽  
Executive Directors ◽  
Board Diversity ◽  
Content Type ◽  
The Impact

Purpose This study aims to examine the extent to which board characteristics and ownership structure affect firm performance with specific focus on providing new empirical insights following the revised corporate governance (CG) code 2012. Design/methodology/approach This study uses a sample of non-financial firms listed on Pakistan Stock Exchange (PSX)-100 index for the years 2011-2014. Firm performance is measured by accounting-based performance indicators (ROA and ROE) and market-based performance indicators (Tobin’s Q and MTB). This study uses multivariate regression techniques including fixed effects model and two-stage least squares (2SLS). Findings The findings show that board diversity increases over the two periods (pre-2012 and post-2012), whereas there are cases that companies have not fully complied with the revised CG code 2012 in terms of board independence. In addition, the multiple regression results show that firm performance is negatively and significantly associated with institutional ownership. Nevertheless, the results show that board size, board independent, board diversity and board meetings do not have significant impact on firm performance. The findings are fairly consistent and robust across two periods (pre-2012 and post 2012) and a number of econometric models that sufficiently address the potential endogeneity problems. Originality/value To the best of the authors’ knowledge, this is the first empirical study which investigates the impact of the compliance and implementation of 2012 CG code on firm performance in Pakistan. This study is different from the most prior studies in that they use independent non-executive directors rather than conventional non-executive directors to measure board independence.

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.

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