IDEAS home Printed from https://ideas.repec.org/a/eee/reveco/v103y2025ics1059056025006355.html
   My bibliography  Save this article

The impact of corporate governance on firm value: Understanding the role of strategic change

Author

Listed:
  • Bagh, Tanveer
  • Hunjra, Ahmed Imran
  • Corbet, Shaen

Abstract

This study explores the impact of corporate governance practices on firm value and examines the moderating role of strategic change within publicly traded US companies. Utilising a comprehensive sample of 1,827 firms, we employ dynamic panel two-step Generalised Method of Moments (GMM) and high-dimensional fixed-effect methodologies to analyse these relationships robustly. Our findings indicate that robust corporate governance significantly enhances firm value, and strategic change initiatives further strengthen this effect. By leveraging Bloomberg’s governance disclosure data, we construct an index differentiating between high and low levels of governance disclosure. The results demonstrate that firm value significantly improves when corporate governance disclosures exceed industry and year-adjusted averages. This research contributes to research surrounding corporate governance and firm valuation, providing critical insights designed to enhance organisational performance and shareholder value through effective governance and strategic agility.

Suggested Citation

  • Bagh, Tanveer & Hunjra, Ahmed Imran & Corbet, Shaen, 2025. "The impact of corporate governance on firm value: Understanding the role of strategic change," International Review of Economics & Finance, Elsevier, vol. 103(C).
    • Handle: RePEc:eee:reveco:v:103:y:2025:i:c:s1059056025006355
    DOI: 10.1016/j.iref.2025.104472
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S1059056025006355
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.iref.2025.104472?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to

    for a different version of it.

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;
    ;

    JEL classification:

    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
    • M14 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Corporate Culture; Diversity; Social Responsibility
    • Q01 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - General - - - Sustainable Development

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:reveco:v:103:y:2025:i:c:s1059056025006355. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/inca/620165 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.