Corporate Governance and Corporate Performance: Does Former Explains Latter in Corporate India?

24 Pages Posted: 16 Dec 2019

See all articles by Sajit Jacob

Sajit Jacob

Bharathiar University, Department of Commerce

Date Written: November 22, 2019

Abstract

This paper discusses the effects of Corporate Governance (CG) on corporate performance. This study investigates the nature and intensity of influence CG exercises on the firm performance. The main goal is to prove that CG is a determinant for firm performance. Main attention was paid to ANOVA based inferential statistics, coefficient of correlation and Ordinary Least Squares (OLS) based regression analysis to investigate the objective. This topic was chosen to examine whether the positive correlations between CG and firm performance in western studies are applicable in Indian context. OLS based econometric modelling identifies Equity Multiplier Ratio (EMR) and Times Interest Earned (TIE) as leading indicators of Economic Value Added (EVA) that needs CG attention. The major findings of the paper are, there are no statistically significant differences among the means of EVA on comparing across CGPI categories. However, there exist a positive correlations in all CGPI categories with EVA. The above findings suggest that by a financial value chain, CGPI activism on the leading indicators of EVA will culminate in the improvement of EVA itself.

Keywords: Corporate Governance Performance Index, Firm Performance, Economic Value Added

JEL Classification: G34, G30

Suggested Citation

Jacob, Sajit, Corporate Governance and Corporate Performance: Does Former Explains Latter in Corporate India? (November 22, 2019). Available at SSRN: https://ssrn.com/abstract=3491548 or http://dx.doi.org/10.2139/ssrn.3491548

Sajit Jacob (Contact Author)

Bharathiar University, Department of Commerce ( email )

India

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
13
Abstract Views
124
PlumX Metrics