The relationship between Corporate Governance and Firm Financial Performance: An Empirical Investigation of an emerging market

Farquhar, S. and Amin, Q. (2021) The relationship between Corporate Governance and Firm Financial Performance: An Empirical Investigation of an emerging market. International Journal of Business Governance and Ethics. 15(2) 1741-802X.

Farquhar_Stuart_and_Amin_Qazi_ISP_2020_The_relationship_between_Corporate_Governance_and_Firm_Financial_Pe ... (827kB)

Item Type:	Article
Abstract:	We investigate whether the distinct nature of Multinational firms (MNC) differently influence the governance-performance relationship compared to the local firms in Pakistan. We used a dynamic system GMM estimator that produces consistent and efficient estimation after controlling for dynamic endogeneity and simultaneity. Our results demonstrate that corporate governance (CG) has a significant positive impact on firm financial performance whilst CG practice of MNC firms is more effective than local firms in Pakistan. We observed two distinct financing behaviours i.e. ‘pro-active investment behaviour’ of MNC firms and ‘conservative investment behaviour’ of local firms. We conclude that a well-established corporate culture, significant financial worth and firms’ higher growth rate are key determinants of better CG practice.
Uncontrolled Keywords:	Corporate governance, Firm performance, Endogeneity, System GMM
Creators:	Farquhar, Stuart and Amin, Qazi
Faculties, Divisions and Institutes:	Faculties > Faculty of Business & Law > Accounting & Finance
Date:	2 April 2021
Date Type:	Publication
Journal or Publication Title:	International Journal of Business Governance and Ethics
Volume:	15
Number:	2
Language:	English
DOI:	https://doi.org/10.1504/IJBGE.2020.10030780
ISSN:	1741-802X
Status:	Published / Disseminated
Refereed:	Yes
Related URLs:	https://www.mendeley.com/catalogue/469ee... https://pure.northampton.ac.uk/en/public...
URI:	http://nectar.northampton.ac.uk/id/eprint/14887

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