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Corporate Governance and Shareholder Value in Listed Firms: An Empirical Analysis in Five Countries (France, Italy, Japan, UK, USA)

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  • Monda, Barbara
  • Giorgino, Mrco

Abstract

In this paper, we design a multi-dimensional index to measure the quality of Corporate Governance systems adopted by firms and use it to investigate the correlation between Corporate Governance quality and firm value. Unlike most studies that examine the relationship between only one dimension of Governance and firm value, we present a complex index (CGI) composed of 39 variables referable to four dimensions: Board, Remuneration, Shareholder Rights and Disclosure. By analysing a sample of 100 large companies listed on the main stock markets in five different countries over three years (2009-2011), we confirm the widespread hypothesis of the existence of a positive and statistically significant relationship between Corporate Governance, as measured by a subset of 12 variables, and firm value.

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Bibliographic Info

Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 45422.

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Date of creation: 01 Mar 2013
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Handle: RePEc:pra:mprapa:45422

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Keywords: Corporate Governance; Corporate Governance Index; firm value;

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  3. Bubbico, Rossana & Giorgino, Marco & Monda, Barbara, 2012. "The Impact of Corporate Governance on the Market Value of Financial Institutions - Empirical Evidences from Italy," MPRA Paper 45419, University Library of Munich, Germany.
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  16. Demsetz, Harold & Lehn, Kenneth, 1985. "The Structure of Corporate Ownership: Causes and Consequences," Journal of Political Economy, University of Chicago Press, vol. 93(6), pages 1155-77, December.
  17. Bauer, Rob & Frijns, Bart & Otten, Rogér & Tourani-Rad, Alireza, 2008. "The impact of corporate governance on corporate performance: Evidence from Japan," Pacific-Basin Finance Journal, Elsevier, vol. 16(3), pages 236-251, June.
  18. Stulz, ReneM., 1990. "Managerial discretion and optimal financing policies," Journal of Financial Economics, Elsevier, vol. 26(1), pages 3-27, July.
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  21. Brown, Lawrence D. & Caylor, Marcus L., 2006. "Corporate governance and firm valuation," Journal of Accounting and Public Policy, Elsevier, vol. 25(4), pages 409-434.
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