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Corporate Governance and Firm’s Profitability: An Emerging Economy-based Investigation

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  • Mohammad Rajon Meah
  • Nasir Uddin Chaudhory

Abstract

This article aims to investigate the impact of corporate governance through board size, female directors, family duality and director ownership on firm’s profitability in Bangladesh. It’s a quantitative study on 110 manufacturing firms listed in Dhaka Stock Exchange. Multivariate pooled Ordinary Least Square (OLS) regressions are applied on 512 sample-year observations from the year 2013 to 2017 to test the hypotheses in the study. On one side, the results reveal that larger board size and female directors on board are positively associated with firm’s profitability, which in turns helps to enhance firm’s profitability. On the other side, it is also found in the results that percentage of shares held by the directors and family duality are negatively related to firm’s profitability and thus reduces firm performance. The outcomes of this study advocate the policymakers to formulate a policy by addressing the percentage of shares held by the directors to be kept at a certain level.

Suggested Citation

  • Mohammad Rajon Meah & Nasir Uddin Chaudhory, 2019. "Corporate Governance and Firm’s Profitability: An Emerging Economy-based Investigation," Indian Journal of Corporate Governance, , vol. 12(1), pages 71-93, June.
    • Handle: RePEc:sae:ijcgvn:v:12:y:2019:i:1:p:71-93
    DOI: 10.1177/0974686219836544
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    References listed on IDEAS

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