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ASEAN Corporate Governance Scorecard and Firm Value

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  • Alex Johanes Simamora

Abstract

Purpose: This research is aimed to examine the effect of ASEAN corporate governance scorecard on firm value. Design/Methodology/Approach: Research sample consists of 491 manufacture firms listed in stock market of Thailand, Singapore, Philippines, Indonesia, and Malaysia. ASEAN corporate governance scorecard is measured by dummy variable, which is big 50 and non-big 50 firm’s rank of highest ASEAN corporate governance scorecard. Firm value measured by Tobin’s Q. Hypothesis test uses country fixed-effect regression analysis. Findings: This research finds that the big 50 of highest ASEAN corporate governance scorecards have positive effect on firm value. Higher ASEAN corporate governance scorecard as improvement of rights of shareholders, equitable treatment of shareholders, role of stakeholders, disclosure and transparency, responsibilities of the board, will improve firm’s value. Practical Implications: Management could make firm policy about optimal corporate governance, so management could maximizes shareholders‘ wealth by firm value increasing. Investors, who have interest send their investment abroad especially in ASEAN, have to see condition of corporate governance of public-listed firms, so investors’ wealth could be maximized. Originality/Value: This research provides early evidence about new corporate governance formulation, especially in ASEAN, and its effect on firm value in stock markets in ASEAN.

Suggested Citation

  • Alex Johanes Simamora, 2020. "ASEAN Corporate Governance Scorecard and Firm Value," International Journal of Finance, Insurance and Risk Management, International Journal of Finance, Insurance and Risk Management, vol. 10(3), pages 66-80.
    • Handle: RePEc:ers:ijfirm:v:10:y:2020:i:3:p:66-80
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    More about this item

    Keywords

    Corporate Governance scorecard; firm value; ASEAN; Tobin’s Q.;
    All these 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
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance

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