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Nexus between corporate governance disclosure and firm performance: a study on the Bangladeshi pharmaceutical companies

Author

Listed:
  • Md. Nazrul Islam

    (Department of Accounting and Information Systems, Jatiya Kabi Kazi Nazrul Islam University, Trishal, Mymensingh, Bangladesh)

  • Syed Zabid Hossain

    (Department of Accounting and Information Systems, Jatiya Kabi Kazi Nazrul Islam University, Trishal, Mymensingh, Bangladesh)

  • Md. Sayaduzzaman

    (Department of Accounting and Information Systems, Jatiya Kabi Kazi Nazrul Islam University, Trishal, Mymensingh, Bangladesh)

Abstract

The paper intended to evaluate the extent of corporate disclosure compliance and its effect on the financial performance of Bangladeshi pharmaceutical companies listed on the DSE during a twelve-year period, from 2007 to 2020. The study explored the affinity between the Corporate Governance Disclosure Index (CGDI) and firm financial performance employing econometric techniques, such as fixed effect and random effect models. The study calculated the disclosure scores as a percentage of a given firm's overall score to the probable score it could achieve. The CGDI of the sample companies showed a positive and substantial effect on company performance as an accounting measure ROA and an insignificant effect as a market measure Tobin’s Q. The study also revealed that sample firms followed the BSEC guidelines partially. These findings have implications for companies that fail to comply with the full disclosure principle, which holds that a company must disclose all material information in its financial statements in order to touch the reader's comprehension of those statements. In addition, these results imply that the code of CG requires a thorough examination to make essential modifications. Key Words:Corporate governance, Corporate disclosure, Firm performance, Pharmaceutical companies, Bangladesh

Suggested Citation

  • Md. Nazrul Islam & Syed Zabid Hossain & Md. Sayaduzzaman, 2024. "Nexus between corporate governance disclosure and firm performance: a study on the Bangladeshi pharmaceutical companies," International Journal of Research in Business and Social Science (2147-4478), Center for the Strategic Studies in Business and Finance, vol. 13(1), pages 303-313, January.
    • Handle: RePEc:rbs:ijbrss:v:13:y:2024:i:1:p:303-313
    DOI: 10.20525/ijrbs.v13i1.3175
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