Corporate board and shareholder structure, cost of capital, and the performance of Thai listed companies: the application of path analysis

The objectives of this study were: (1) to develop and validate the coherence of a causal relationship model with empirical data; and (2) to study the relationship model and compare the influence of board and shareholder structure on cost of capital and corporate performance using path analysis. The data of 156 Thai listed companies were collected throughout 2016-2020. The results showed that percentages of free float and board size had positive relationship with the cost of debt. Meanwhile, percentage of outside directors, percentage of the audit committee in financial or accounting expertise, and percentage of director meetings had negative relationship with the cost of debt. Furthermore, the cost of debt had negative relationship with return on assets. The findings yield important implications for international markets and the global economy as they support the agency theory that explains that good corporate governance reduces conflicts between shareholders and creditors.