The relationship between liquidity, corporate governance, and firm valuation: Evidence from Russia
AbstractThis paper examines the hypotheses that liquidity improves corporate governance, and better governance enhances valuation of Russian firms. We find a positive causal relationship between measures of liquidity and corporate governance. Additionally, we document the strong positive impact of corporate governance on valuation. Our results are economically significant. For example, we document that a 10% decrease in the proportion of zero return days implies a 0.34% increase in transparency and disclosure, which in turn leads to a 9.6% increase in firm valuation. Our research findings shed light on the important role of liquidity in improving corporate governance and valuation.
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Bibliographic InfoArticle provided by Elsevier in its journal Emerging Markets Review.
Volume (Year): 13 (2012)
Issue (Month): 4 ()
Contact details of provider:
Web page: http://www.elsevier.com/locate/inca/620356
Corporate governance; Liquidity; Russia; Tobin's Q;
Find related papers by JEL classification:
- F39 - International Economics - - International Finance - - - Other
- G39 - Financial Economics - - Corporate Finance and Governance - - - Other
- G15 - Financial Economics - - General Financial Markets - - - International Financial Markets
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