An Integrated Framework of Corporate Governance and Firm Valuation - Evidence from Switzerland

59 Pages Posted: 27 Jan 2004

See all articles by Stefan Beiner

Stefan Beiner

University of Basel; University of Oxford - Said Business School

Wolfgang Drobetz

Hamburg University

Markus Schmid

University of St. Gallen - Swiss Institute of Banking and Finance; University of St. Gallen - School of Finance

Heinz Zimmermann

University of Basel - Center for Economic Science (WWZ) - Department of Finance

Date Written: January 2004

Abstract

Recent empirical work shows evidence of a positive relationship between firm-specific corporate governance and firm valuation. Instead of looking at a single control mechanism, we use a broad corporate governance index and additional variables related to ownership structure, board characteristics, and leverage to provide a comprehensive description of firm-level corporate governance for a broad sample of Swiss firms. We carefully control for the endogeneity of these control mechanisms by developing a system of simultaneous equations. Our results support the widespread hypothesis of a positive relationship between corporate governance and Tobin's Q.

Keywords: Corporate governance; Ownership structure; Firm valuation; Endogeneity

JEL Classification: G12, G32, G34, G38

Suggested Citation

Beiner, Stefan and Drobetz, Wolfgang and Schmid, Markus and Zimmermann, Heinz, An Integrated Framework of Corporate Governance and Firm Valuation - Evidence from Switzerland (January 2004). ECGI - Finance Working Paper No. 34/2004. Available at SSRN: https://ssrn.com/abstract=489322 or http://dx.doi.org/10.2139/ssrn.489322

Stefan Beiner

University of Basel ( email )

Holbeinstrasse 12
Basel, CH-4051
Switzerland

University of Oxford - Said Business School ( email )

Park End Street
Oxford, OX1 1HP
Great Britain

Wolfgang Drobetz (Contact Author)

Hamburg University ( email )

Moorweidenstrasse 18
Hamburg, 20148
Germany

Markus Schmid

University of St. Gallen - Swiss Institute of Banking and Finance ( email )

Rosenbergstrasse 52
St. Gallen, 9000
Switzerland

University of St. Gallen - School of Finance ( email )

Unterer Graben 21
St.Gallen, CH-9000
Switzerland

Heinz Zimmermann

University of Basel - Center for Economic Science (WWZ) - Department of Finance ( email )

Peter Merian Weg 6
Basel, 4002
Switzerland
+41 61 267 33 16 (Phone)
+41 61 267 08 98 (Fax)

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