Corporate Governance and Capital Markets: A Conceptual Framework

HAQUE, F., ARUN, TG., & KIRKPATRICK, C. (2008). Corporate governance and capital markets: a conceptual framework. Corporate Ownership and Control, Vol. 5 Issue. 2(Cont.2), 264-276.

28 Pages Posted: 19 Sep 2017

See all articles by Faizul Haque

Faizul Haque

Edinburgh Business School

Thankom Gopinath Arun

University of Central Lancashire

Colin Kirkpatrick

University of Manchester - Institute for Development Policy and Management (IDPM)

Date Written: 2008

Abstract

This paper outlines a conceptual framework of the relationship between corporate governance and two important determinants of capital market development namely, a firm’s access to finance, and its financial performance. The framework assumes that a firm’s corporate governance is simultaneously determined by a group of related governance components and other firm characteristics. Whilst the capital markets play a crucial role in enhancing corporate governance standards, the effectiveness and credibility of such effort might be constrained by poor firm-level corporate governance. Moreover, the cause and effect relationship can work in the opposite direction e.g. firm-level corporate governance quality can enhance both the firm’s ability to gain access to finance and its financial performance, which eventually lead to capital market development. The framework is primarily based on the economic approaches to corporate governance, although it recognises part of the assumptions of the stakeholder theory and the political economy aspects of corporate governance.

Keywords: Corporate Governance, Capital Markets, Conceptual Framework

Suggested Citation

Haque, Faizul and Arun, Thankom Gopinath and Kirkpatrick, Colin, Corporate Governance and Capital Markets: A Conceptual Framework (2008). HAQUE, F., ARUN, TG., & KIRKPATRICK, C. (2008). Corporate governance and capital markets: a conceptual framework. Corporate Ownership and Control, Vol. 5 Issue. 2(Cont.2), 264-276. . Available at SSRN: https://ssrn.com/abstract=3037927

Faizul Haque (Contact Author)

Edinburgh Business School ( email )

Riccarton
Edinburgh, Scotland EH14 4AS
United Kingdom

Thankom Gopinath Arun

University of Central Lancashire ( email )

United Kingdom

Colin Kirkpatrick

University of Manchester - Institute for Development Policy and Management (IDPM) ( email )

Manchester M13 9GH
United Kingdom
0161 275 2808 (Phone)
0161 273 8829 (Fax)

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