Corporate governance and firm performance.
This paper examines the relation between corporate governance and firm performance among Singapore firms. We use the recently developed Governance and Transparency Index (“GTI”) to measure corporate governance and examine the effect of governance on firm performance, as measured by Tobin’s Q, Return...
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| Main Authors: | , , |
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| Other Authors: | |
| Format: | Final Year Project |
| Language: | English |
| Published: |
2013
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| Subjects: | |
| Online Access: | http://hdl.handle.net/10356/51552 |
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| Institution: | Nanyang Technological University |
| Language: | English |
| Summary: | This paper examines the relation between corporate governance and firm performance among Singapore firms. We use the recently developed Governance and Transparency Index (“GTI”) to measure corporate governance and examine the effect of governance on firm performance, as measured by Tobin’s Q, Return on Assets (“ROA”) and Return on Equity (“ROE”).
We find that there is a significant positive relation between corporate governance and firm performance for our sample of Singapore Exchange listed firms. By inputting the GTI into our cross-sectional regression models, it can also be used to predict firm performance in the next period. However, upon examining the causal relation between corporate governance and firm performance, our results were inconclusive possibly due to the lack of data over a longer period of time. We conclude that the finding is consistent with the notion that firms are in an optimal state of corporate governance structure and any over-compliance in corporate governance have little effect on firm performance. |
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