Corporate Governance and Alternative Performance Measures: Evidence from Australian Firms

Posted: 21 Dec 2011

See all articles by Peter K. Pham

Peter K. Pham

University of Sydney Business School; Institute of Global Finance, UNSW Business School; Financial Research Network (FIRN)

Jo-Ann Suchard

Financial Research Network (FIRN); UNSW Business School

Jason Zein

UNSW Business School; Financial Research Network (FIRN)

Multiple version iconThere are 2 versions of this paper

Date Written: December 9, 2011

Abstract

We examine the extent to which individual monitoring mechanisms enhance firm performance and shareholder value. We use a sample of Australian firms, from 1994 to 2003, to analyze the relationship between firm performance and corporate governance. This provides a long time series of governance data by international standards and allows us to study governance – performance dynamics over an extensive period. We use Stern Stewart & Co’s economic value added (EVA) as an alternative performance measure and provide a comparison to Tobin’s Q. However, similar to the international evidence, we do not find a significant relationship between either of the performance measures and corporate governance. Using various econometric techniques we show that our results are also robust to endogeneity biases that can arise in the governance – performance relation.

Keywords: Australia, corporate governance, performance

Suggested Citation

Pham, Peter Kien and Suchard, Jo-Ann and Suchard, Jo-Ann and Zein, Jason, Corporate Governance and Alternative Performance Measures: Evidence from Australian Firms (December 9, 2011). Australian Journal of Management, Vol. 36, No. 3, 2011, Available at SSRN: https://ssrn.com/abstract=1974983

Peter Kien Pham (Contact Author)

University of Sydney Business School ( email )

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Sydney, NSW 2006
Australia
+61 2 9036 9103 (Phone)
+61 2 9351 6461 (Fax)

Institute of Global Finance, UNSW Business School ( email )

UNSW Business School
High St
Sydney, NSW 2052
Australia

Financial Research Network (FIRN) ( email )

C/- University of Queensland Business School
St Lucia, 4071 Brisbane
Queensland
Australia

HOME PAGE: http://www.firn.org.au

Jo-Ann Suchard

Financial Research Network (FIRN)

C/- University of Queensland Business School
St Lucia, 4071 Brisbane
Queensland
Australia

HOME PAGE: http://www.firn.org.au

UNSW Business School ( email )

high street
High St
sydney, NSW 2052
Australia

Jason Zein

UNSW Business School ( email )

Sydney, NSW 2052
Australia
+61 2 93855858 (Phone)
+61 2 93855858 (Fax)

Financial Research Network (FIRN)

C/- University of Queensland Business School
St Lucia, 4071 Brisbane
Queensland
Australia

HOME PAGE: http://www.firn.org.au

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