IDEAS home Printed from
   My bibliography  Save this article

Board structure, corporate governance and firm value: evidence from Hong Kong


  • Adrian C. H. Lei
  • Frank M. Song


This article investigates the effects of board structure and internal Corporate-Governance (CG) mechanisms on firm value in an emerging market with concentrated ownership and family involvement. Using a unique Hong Kong (HK) panel dataset from 2001 to 2009, we create a board-structure index that captures board independence, balance of power and conflicts of interest. We also construct other major CG mechanisms to correctly specify our model. We combine the 13 CG attributes, which consist of binary and continuous variables, with four CG mechanisms, using Principal Component Analysis (PCA). In contrast with prior evidence from developed markets, our results indicate that firms with independent board structure are associated with higher firm value and are both statistically and economically significant. The results also suggest that board structure is the most important among the major internal CG mechanisms.

Suggested Citation

  • Adrian C. H. Lei & Frank M. Song, 2012. "Board structure, corporate governance and firm value: evidence from Hong Kong," Applied Financial Economics, Taylor & Francis Journals, vol. 22(15), pages 1289-1303, August.
  • Handle: RePEc:taf:apfiec:v:22:y:2012:i:15:p:1289-1303
    DOI: 10.1080/09603107.2011.650329

    Download full text from publisher

    File URL:
    Download Restriction: Access to full text is restricted to subscribers.

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    1. Patel, Sandeep A. & Balic, Amra & Bwakira, Liliane, 2002. "Measuring transparency and disclosure at firm-level in emerging markets," Emerging Markets Review, Elsevier, vol. 3(4), pages 325-337, December.
    Full references (including those not matched with items on IDEAS)


    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.

    Cited by:

    1. Rivo-López, Elena & Villanueva-Villar, Mónica & Lago-Peñas, Santiago, 2014. "Does the composition of the board matter? On the relationship between corporate governance and value creation," MPRA Paper 56597, University Library of Munich, Germany.
    2. Santiago Lago-Peñas & Elena Rivo-López & Mónica Villanueva-Villar, 2016. "On the relationship between corporate governance and value creation in an economic crisis: Empirical evidence for the Spanish case," Working Papers. Collection C: Family business 1602, Universidade de Vigo, GEN - Governance and Economics research Network.
    3. Ararat, Melsa & Black, Bernard S. & Yurtoglu, B. Burcin, 2017. "The effect of corporate governance on firm value and profitability: Time-series evidence from Turkey," Emerging Markets Review, Elsevier, vol. 30(C), pages 113-132.

    More about this item


    Access and download statistics


    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:taf:apfiec:v:22:y:2012:i:15:p:1289-1303. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Chris Longhurst). General contact details of provider: .

    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.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with 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.

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

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.