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Is corporate governance relevant to firm performance? Evidence from Indian manufacturing companies

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  • Subhas Mondal
  • Tarak Nath Sahu

Abstract

This article empirically examines how the performance of Indian manufacturing corporations is affected by corporate governance practices. The study has used panel data comprising of 76 manufacturing companies listed in BSE, for a consecutive six-year period, from 2015-2016 to 2020-2021. The study has applied panel data regression model to enquire the impact of ownership structure variables; and also board composition variables on firm performance using Tobin's Q and ROA. The findings reveal that ownership structure variables, board size and multiplicity of the board positively affect both ROA and Tobin's Q. While independent board and women director show positive effect on Tobin's Q, the CEO-duality is negatively associated with Tobin's Q. The study suggests policymakers to enhance the multiplicity of directors and gender diversity, to maintain the right proportion of board independency, and to increase the size of board. Policymakers may also restrict the CEO to play dual role.

Suggested Citation

  • Subhas Mondal & Tarak Nath Sahu, 2024. "Is corporate governance relevant to firm performance? Evidence from Indian manufacturing companies," International Journal of Business Governance and Ethics, Inderscience Enterprises Ltd, vol. 18(1), pages 27-44.
    • Handle: RePEc:ids:ijbget:v:18:y:2024:i:1:p:27-44
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    Cited by:

    1. Titus Ayobami Ojeyinka & Reon Matemane, 2025. "Does Institutional Quality Matter in the Interplay Between Corporate Governance and Firm Performance? Lessons from South African Financial Firms," Indian Journal of Corporate Governance, , vol. 18(2), pages 221-265, December.
    2. Aymen Ajina & Ajej Bhiri Najah & Fathi Jouini, 2025. "CO2 Emissions and Firm Performance: Assessing the Effectiveness of the Paris Agreement and the Moderating Role of ESG Performance and ISO 14001 Certification," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 32(6), pages 8026-8051, November.
    3. Sofia Karagiannopoulou & Andreas Andronikidis & Nikolaos Sariannidis & Grigoris Giannarakis, 2025. "Is Board Gender Diversity a Superficial Goal or a Strategic Asset for CSR Performance? The Role of Critical Mass and Board Size," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 32(6), pages 8674-8687, November.
    4. Mohamad H. Shahrour & Alireza Rohani & Michal Wojewodzki & Dung V. Tran, 2025. "Carbon Performance and Financial Performance: How R&D Makes a Difference Pre‐ and Post‐Paris Accord," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 30(4), pages 4082-4094, October.

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