Are internal governance mechanisms efficient? The case of a developing economy

This study examines the relationship between internal corporate governance mechanisms and corporate financial performance. We examine this relationship considering the endogeneity between corporate governance and firm characteristics utilising a sample of large listed Indian firms. We construct and...

Descripción completa

Guardado en:
Detalles Bibliográficos
Autores principales: Mehul Raithatha, Arunima Haldar
Formato: article
Lenguaje:EN
Publicado: Elsevier 2021
Materias:
Acceso en línea:https://doaj.org/article/ed8d07346afa4c61bb98159f6b406c10
Etiquetas: Agregar Etiqueta
Sin Etiquetas, Sea el primero en etiquetar este registro!
Descripción
Sumario:This study examines the relationship between internal corporate governance mechanisms and corporate financial performance. We examine this relationship considering the endogeneity between corporate governance and firm characteristics utilising a sample of large listed Indian firms. We construct and validate a ''Corporate Governance Index (CGI)'' based on six internal governance mechanisms affecting the governance of Indian firms. The study estimates the model using the simultaneous equation method. The results obtained suggest that corporate governance has a positive association with corporate financial performance. Thus, firms will gain by improving their corporate governance as it leads to better corporate financial performance, which is in the interest of all stakeholders.