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Impact of Corporate Governance on Value Creation and Corporate Productivity: Evidence from Tunisian Context

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  • Rim Ayari
  • Boutheina Regaieg

Abstract

The governance practices and the value of the company have ancient origins but still relevant. Faced with economic, social and environmental upheavals, the Tunisian company is subject to contradictory injunctions and must redefine its role in society. Today there is a general consensus that governance has a significant impact on the value of the company. The areas on which governance can act to create value are many and varied and there can be no question of looking at them exhaustively. The purpose of this paper is to examine the impact of governance mechanisms on the value creation of Tunisian firms, particularly measured by total factor productivity. Based on a sample of 28 corporations listed on Tunisian stock market during the period 2008-2014, our study employs regression analysis to test the impact of governance mechanisms on firm value as measured by productivity. As predicted by the theory, empirical data show (i) that debts have a negative and significant effect on productivity such as measured by the ratio of total debt to total assets. (ii) the presence of institutional investors on boards of directors also increases the value of the company. (iii) However, contrary to previous studies, the duality that combines the functions of the Chairman of the Board and the Chief Executive Officer has no effect on the value creation of Tunisian companies.

Suggested Citation

  • Rim Ayari & Boutheina Regaieg, 2018. "Impact of Corporate Governance on Value Creation and Corporate Productivity: Evidence from Tunisian Context," International Journal of Economics and Finance, Canadian Center of Science and Education, vol. 10(3), pages 215-226, March.
    • Handle: RePEc:ibn:ijefaa:v:10:y:2018:i:3:p:215-226
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    More about this item

    Keywords

    corporate governance; ownership structure; board of directors; value creation; debt; productivity;
    All these keywords.

    JEL classification:

    • R00 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General - - - General
    • Z0 - Other Special Topics - - General

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