Governance Practices of Indian Firms: An Empirical Analysis

10 Pages Posted: 14 Aug 2013 Last revised: 3 Oct 2018

See all articles by Arunima Haldar

Arunima Haldar

S.P. Jain Institute of Management and Research

S.V.D. Nageswara Rao

Indian Institute of Technology (IIT), Bombay - Shailesh J. Mehta School of Management (SJM)

Date Written: March 20, 2013

Abstract

This paper examines the impact of corporate governance (CG) on financial performance (FP) considering the endogeneity between governance and firm characteristics using a sample of large listed Indian firms from 2008 to 2011. We construct a "CG Index" based on six important governance mechanisms covering a total of 44 attributes affecting the governance of Indian companies. The panel data regression is employed for empirical analysis. The results indicate that CG has a strong influence on performance of Indian firms. We also find that firms with promoter dominated boards and lower leverage report better performance while firm size negatively impacts performance.

Keywords: Corporate Governance Index, Financial Performance, Panel Data Analysis, Endogeneity, Simultaneous Equation Model

JEL Classification: C33, C36, G18, G34, M41

Suggested Citation

Haldar, Arunima and Nageswara Rao, S. V. D., Governance Practices of Indian Firms: An Empirical Analysis (March 20, 2013). The Empirical Economic Letters, 12 (9), 975-984, Available at SSRN: https://ssrn.com/abstract=2309505

Arunima Haldar (Contact Author)

S.P. Jain Institute of Management and Research ( email )

Munshi Nagar, Dadabhai Road
Andheri West
Mumbai, Maharashtra 119579
India

S. V. D. Nageswara Rao

Indian Institute of Technology (IIT), Bombay - Shailesh J. Mehta School of Management (SJM) ( email )

Powai
Mumbai 400076
India
91-22-25767789 (Phone)
91-22-25722872 (Fax)

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