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Corporate Governance Mechanisms and Firm Performance: Evidence from Finland

  • von Nandelstadh , Alexander

    (Swedish School of Economics and Business Administration)

  • Rosenberg, Matts


    (Swedish School of Economics and Business Administration)

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    This paper examines the association between corporate governance attributes and firm performance of Finnish firms during 1990 – 2000. The empirical results suggest that corporate governance matters for firm performance. First, univariate test results indicate that firms characterized by a high (efficient) level of corporate governance have delivered greater stock returns, are higher valued based on the measure of Tobin’s Q, and exhibit higher ratios of cash flow to assets, on average, in comparison to their counterparts characterized by a low (inefficient) level of corporate governance. Second, controlling for a number of well-known determinants of stock returns, we find evidence that firms categorized by inefficient corporate governance have delivered inferior returns to shareholders during the investigation period. Finally, after controlling for several common determinants of firm value, we find that firms characterized by efficient corporate governance have been valued higher during the investigation period, measured by Tobin’s Q.

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    Paper provided by Hanken School of Economics in its series Working Papers with number 497.

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    Length: 28 pages
    Date of creation: 19 May 2003
    Date of revision:
    Handle: RePEc:hhb:hanken:0497
    Contact details of provider: Postal: Hanken School of Economics, Arkadiankatu 22, P.O.B. 479; FIN 00101 Helsinki, Finland
    Phone: +358-9-431 331
    Fax: +358-9-431 33 333
    Web page:

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