Investigating the Effects of Corporate Governance System Quality on Company Performance

Document Type : Original Research

Author

Faculty of Accounting, Payam Noor University of Qeshm, Qeshm Island, Iran

Abstract

In general, corporate governance (CG) includes legal, cultural, and institutional arrangements that will determine companies’ future direction and performance. The current research mainly tries to evaluate the impact of corporate governance system quality on the performance of the companies listed in Tehran Stock Exchange. In the current research, the quality of corporate governance system is considered as the independent variable to be able to examine its impact on the dependent variables including return on assets (ROA), return on equity (ROE), economic value added (EVA), and market value added (MVA). The research statistical population is composed of all of the companies listed in Tehran Stock Exchange within 2008 to 2014, and the sample size based on screening method and after the removal of outlier observations was obtained to be 112 firms. In the research, integrated data and also panel data with fixed and random effects were used. The results from the companies’ data analysis using multivariate regression at the confidence level of 95% shows that the quality of corporate governance system has a direct and positive impact on the dependent variables including ROA, ROE, EVA, and MVA.

Keywords

References

Masulis, R.W., C. Wang, and F. Xie. (2012). Globalizing the boardroom—The effects of foreign directors on corporate governance and firm performance. Journal of Accounting and Economics. 527-554.
Claessens, S. and B.B. Yurtoglu. (2013) Corporate governance in emerging markets: A survey. Emerging Markets Review.1-33.
Shurvarzi, M.R., Soleimani, H., Foroutan, O., (2015) The relationship between corporate governance and corporate performance based on fuzzy regression. Research in financial accounting and auditing. 121-139.
Sáenz González, J. and E. García-Meca, (2013), Does Corporate Governance Influence Earnings Management in Latin American Markets? Journal of Business Ethics. 419-440.
Jo, H. and M.A. Harjoto, (2011), The Causal Effect of Corporate Governance on Corporate Social Responsibility. Journal of Business Ethics, 53-72.
Michelon, G. and A. Parbonetti, (2010), The effect of corporate governance on sustainability disclosure. Journal of Management & Governance, 477-509.
Khan, A., M.B. Muttakin, and J. Siddiqui, (2012), Corporate Governance and Corporate Social Responsibility Disclosures: Evidence from an Emerging Economy. Journal of Business Ethics, 207-223.
Giroud, X., & Mueller, H. M, (2011), Corporate governance, product market competition, and equity prices. Journal of Finance, 563-600.

Files

Share

How to cite

Statistics