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...

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Autores principales:	Mehul Raithatha, Arunima Haldar
Formato:	article
Lenguaje:	EN
Publicado:	Elsevier 2021
Materias:	Corporate governance index Construct validity Corporate financial performance Endogeneity Simultaneous equation method India Business HF5001-6182
Acceso en línea:	https://doaj.org/article/ed8d07346afa4c61bb98159f6b406c10
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spelling	oai:doaj.org-article:ed8d07346afa4c61bb98159f6b406c102021-11-20T04:55:55ZAre internal governance mechanisms efficient? The case of a developing economy0970-389610.1016/j.iimb.2021.08.004https://doaj.org/article/ed8d07346afa4c61bb98159f6b406c102021-09-01T00:00:00Zhttp://www.sciencedirect.com/science/article/pii/S097038962100063Xhttps://doaj.org/toc/0970-3896This 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.Mehul RaithathaArunima HaldarElsevierarticleCorporate governance indexConstruct validityCorporate financial performanceEndogeneitySimultaneous equation methodIndiaBusinessHF5001-6182ENIIMB Management Review, Vol 33, Iss 3, Pp 191-204 (2021)
institution	DOAJ
collection	DOAJ
language	EN
topic	Corporate governance index Construct validity Corporate financial performance Endogeneity Simultaneous equation method India Business HF5001-6182
spellingShingle	Corporate governance index Construct validity Corporate financial performance Endogeneity Simultaneous equation method India Business HF5001-6182 Mehul Raithatha Arunima Haldar Are internal governance mechanisms efficient? The case of a developing economy
description	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.
format	article
author	Mehul Raithatha Arunima Haldar
author_facet	Mehul Raithatha Arunima Haldar
author_sort	Mehul Raithatha
title	Are internal governance mechanisms efficient? The case of a developing economy
title_short	Are internal governance mechanisms efficient? The case of a developing economy
title_full	Are internal governance mechanisms efficient? The case of a developing economy
title_fullStr	Are internal governance mechanisms efficient? The case of a developing economy
title_full_unstemmed	Are internal governance mechanisms efficient? The case of a developing economy
title_sort	are internal governance mechanisms efficient? the case of a developing economy
publisher	Elsevier
publishDate	2021
url	https://doaj.org/article/ed8d07346afa4c61bb98159f6b406c10
work_keys_str_mv	AT mehulraithatha areinternalgovernancemechanismsefficientthecaseofadevelopingeconomy AT arunimahaldar areinternalgovernancemechanismsefficientthecaseofadevelopingeconomy
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Are internal governance mechanisms efficient? The case of a developing economy

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