Corporate Governance and Firm Value: Evidence from South African (SA) Listed Firms
Collins G. Ntim
University of Southampton - School of Management
Kwaku K. Opong
University of Glasgow - Adam Smith Business School
University of Edinburgh Business School
December 12, 2009
This paper investigates the relationship between a broad corporate governance (CG) index and firm value (Tobin’s Q) using a sample of 169 South African (SA) listed firms between 2002 and 2006. Consistent with the results of prior studies, we find a statistically significant and positive association between good CG practices and firm value. In a series of sensitivity analyses, we find that our results are robust to endogeneity and/or the existence of alternative CG mechanisms, different firm value proxies, alternative CG weighting scheme and firm-level fixed effects. Distinct from past studies, we further examine the link between complying with SA context specific stakeholder CG provisions and firm value. In line with political cost and resource dependence theories, our results reveal a statistically significant and positive nexus between compliance with stakeholder CG provisions and firm value.
Number of Pages in PDF File: 51
Keywords: corporate governance, firm value, affirmative action and stakeholder, provisions, South Africa (SA), King II
JEL Classification: G12, G34, G38working papers series
Date posted: July 17, 2011
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