Empirical Evidence on Corporate Governance and Corporate Performance in Tunisia

Khanchel, Imen

doi:10.1111/j.1467-8683.2007.00655.x

Cited by 84 publications

(25 citation statements)

References 41 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…However, the findings of prior empirical studies investigating the relationship between corporate‐governance ratings and firm value or performance are mixed. As far as emerging countries are concerned, they show that corporate‐governance ratings have a significant positive impact on market value (Black, 2001; Black, Jang, & Kim, 2006; Durnev & Kim, 2005; Gary & Gonzalez, 2008; Khanchel El Mehdi, 2007; Klapper & Love, 2004). However, they disagree on the impact of corporate‐governance ratings on accounting measures (Black et al, 2006; Klapper & Love, 2004).…”

Section: Related Literaturementioning

confidence: 99%

Corporate‐Governance Ratings and Company Performance: A Cross‐European Study

Renders

Gaeremynck

Sercu

2010

Corporate Governance

212

197

View full text Add to dashboard Cite

Manuscript Type: EmpiricalResearch Question/Issue: Prior studies have failed to unequivocally establish a positive relationship between corporategovernance ratings and company performance, although theoretically, we would expect to find one. In this paper, we try to establish whether a positive relationship exists through modeling the relationship more carefully. Research Findings/Insights: After controlling for selection bias and endogeneity simultaneously, we find a significant positive relationship between corporate-governance ratings and performance. However, the strength of this relationship seems to depend on the quality of the institutional environment. Finally, we find that improvements in corporate-governance ratings over time result in decreasing marginal benefits in terms of performance. Theoretical/Academic Implications: Our paper contributes to the literature by showing that improved corporategovernance ratings lead to better performance, but that econometric problems might obscure this relationship. We also show that for a sample of developed countries the institutional environment affects the relationship between governance ratings and performance. Finally, this paper contributes to the literature on the impact, regarding compliance and effectiveness, of codes of good governance. Practitioner/Policy Implications: Our results are relevant for both companies and policy makers. They indicate that companies can improve performance by adhering to good corporate-governance practices. For policy makers, the findings suggest that soft laws and the invisible hand of the market lead to companies improving their corporate governance.

show abstract

Section: Related Literaturementioning

confidence: 99%

Corporate‐Governance Ratings and Company Performance: A Cross‐European Study

Renders

Gaeremynck

Sercu

2010

Corporate Governance

212

197

View full text Add to dashboard Cite

show abstract

“…Though the association of CG and financial performance has been studied previously by several scholars (Sanda et al , 2010; Gruszczynski, 2006; Larcker et al , 2007; Khanchel El Mehdi, 2007), this study investigates this relationship in the MENA countries which, until today, is characterized by overall weak CG. For this research, elements characterizing board and ownership structure are used to study performance and control, for several firm-important regional variables of publicly listed corporations operating in the MENA region, and in light of recent political changes.…”

Section: Introductionmentioning

confidence: 99%

Does corporate governance spillover firm performance? A study of valuation of MENA companies

Arayssi

Jizi

2019

SRJ

View full text Add to dashboard Cite

Purpose The aim of the paper is to examine the association of corporate governance (CG), the firms’ characteristics and the financial performance of firms operating in the Middle East and North Africa (MENA) region after Arab Spring. The study focuses on CG, exemplified by boards’ composition and ownership structure. It also explores the possible moderating effects of environmental social and governance characteristics (ESG), leverage and size on the relationship between CG and the company’s performance. Design/methodology/approach Using Thomson-Reuters database, a sample of 67 firms was extracted in the MENA region to measure CG and financial performance post Arab Spring from 2012 to 2016. Panel GLS regression random effects is used to quantify the relationship; robustness is checked by using several alternative regressions and specifications to the performance measure. Findings The results reveal that board independence (BI) is negatively correlated with firm profitability but ownership concentration and board gender diversification contribute to profits. When firms that voluntarily form a governance committee are examined, ownership is less concentrated. We obtain a stronger impact of good governance on performance in these firms: board composition, in general, and workers’ satisfaction generate more profits; and undertaking ESG activities become a more dispensable activity. The effect of board size (BS) and forming a governance committee are studied and ensuing recommendations are drawn. In addition, relevant internal control of firms’ characteristics that strongly predict firms’ market values are discussed in the context of agency and stewardship theories. Originality/value Despite the fact that governance-performance nexus has been extensively discussed and examined, the focus of this volume of research is on western developed countries. The growing economies of the MENA countries, and the limited governance-performance literature in the MENA context have created a demand to understand the governance environment in these countries and its influence on firm’s performance. In this region where firms’ owners are mainly family members, governments and/or institutions, governance is typically weak; moreover, ownership concentration is expected to guarantee good performance, as the role of independent directors becomes ineffective. For firms where ownership is more diluted, a sound governance system should be established to replace ownership concentration, and to more efficiently monitor management, and consequently improve firm performance. Therefore, this study not only contributes a summary of the prevailing corporate structure in MENA. Moreover, it explains the settings where both the stewardship and agency theories apply in MENA firms. Some recommendation on the importance of changes to the existing governance rules are highlighted in terms of more rules requiring board independence, board gender diversity, limits on board size and establishing governance committees.

show abstract

“…With specific reference to Africa, a large number of past studies have investigated the impact of individual CG mechanisms on firm value (e.g., Kyereboah‐Coleman and Biekpe, , ; Kyereboah‐Coleman et al ., ; Abor, ; Abor and Biekpe, ; Khanchel El Mehdi, ; Kyereboah‐Coleman, ; Sunday, ; Sanda et al ., ; Bokpin, ; Ntim, ; Ntim and Osei, ; Mangena et al ., ). However, and mainly due to the absence of sufficient data, evidence on the impact of composite CG indices on firm valuation in Africa is very rare (Ntim, ).…”

mentioning

confidence: 99%

Corporate Governance, Affirmative Action and Firm Value in Post‐apartheid South Africa: A Simultaneous Equation Approach

Ntim

2013

African Development Review

View full text Add to dashboard Cite

The post-Apartheid South African corporate governance (CG) model is a unique hybridisation of the traditional Anglo-American and Continental European-Asian CG models, distinctively requiring firms to explicitly comply with a number of affirmative action and stakeholder CG provisions, such as black economic empowerment, employment equity, environment, HIV/Aids, and health and safety. This paper examines the association between a composite CG index and firm value in this distinct corporate setting within a simultaneous equation framework. Using a sample of post-Apartheid South African listed corporations, and controlling for potential interdependencies among block ownership, board size, leverage, institutional ownership, firm value and a broad CG index, we find a significant positive association between a composite CG index and firm value. Further, our two-stage least squares results show that there is also a reverse association between our broad CG index and firm value, emphasising the need for future research to adequately control for potential interrelationships between possible alternative CG mechanisms and firm value. Distinct from prior studies, we find that compliance with affirmative action CG provisions impacts positively on firm value. Our results are consistent with agency, legitimacy, political cost, and resource dependence theoretical predictions. Our findings are robust across a number of econometric models that adequately control for different types of endogeneity problems, and alternative accounting, and market-based firm valuation proxies.1

show abstract

Empirical Evidence on Corporate Governance and Corporate Performance in Tunisia

Cited by 84 publications

References 41 publications

Corporate‐Governance Ratings and Company Performance: A Cross‐European Study

Corporate‐Governance Ratings and Company Performance: A Cross‐European Study

Does corporate governance spillover firm performance? A study of valuation of MENA companies

Corporate Governance, Affirmative Action and Firm Value in Post‐apartheid South Africa: A Simultaneous Equation Approach

Contact Info

Product

Resources

About