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Corporate Governance, Cost of Capital and Tobin Q: Empirical Evidence from Turkey Listed Companies

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  • Berna Dogan Basar

    (Gaziantep University, Turkey)

Abstract

Corporate governance has become an important issue with the shaking of trust in companies, as a result of international financial crises, corruption and corporate scandals since the 1980s. Corporate governance is a broad concept and defines the methods, structure and processes of a firm. In this context, the concept of corporate governance plays an important role in ensuring the firm's progress in the right direction and in an optimal way. In this study, the effect of corporate governance practices on firm performance and capital cost is investigated empirically in 46 manufacturing companies listed on Borsa Istanbul between 2010-2019. In this context, the difference GMM proposed by Arellano-Bond (1991) and the dynamic GMM estimator developed by Arellano-Bover (1995) were used. As a result of the study, it has been determined that corporate governance mechanisms have an impact on the performance and capital cost indicators of firms resulting in a positive effect.

Suggested Citation

  • Berna Dogan Basar, 2021. "Corporate Governance, Cost of Capital and Tobin Q: Empirical Evidence from Turkey Listed Companies," South-Eastern Europe Journal of Economics, Association of Economic Universities of South and Eastern Europe and the Black Sea Region, vol. 19(1), pages 51-78.
    • Handle: RePEc:seb:journl:v:19:y:2021:i:1:p:51-78
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    More about this item

    Keywords

    Corporate Governance; Cost of Capital; TobinQ; Borsa Istanbul;
    All these keywords.

    JEL classification:

    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions

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