Stock Price Reaction for Scoring on Corporate Governance

Teker, Suat; Yüksel, Ahmet Hakan

doi:10.1016/j.sbspro.2014.09.101

Cited by 4 publications

(3 citation statements)

References 5 publications

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“…They found the direct positive link of the score of corporate governance with the listed companies' share prices [50]. An interesting study was conducted to measure the response of share prices to corporate governance score announcement results between 2007 and 2013, and they found a sharp positive change in share prices during the first announcement day [51]. Recent studies have focused on various aspects of corporate governance and its relationship with the sustainable development of the entire industry and economy.…”

Section: Corporate Governance Structure and Firms Performancesmentioning

confidence: 99%

Do corporate governance structure and capital structure matter for the performance of the firms? An empirical testing with the contemplation of outliers

Wang

Ramzan

2020

PLoS ONE

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A superlative combination of the Board of Directors (BOD) with diverse members is considered a sign of a good governance structure. Meanwhile, the key decision taken by BOD to make organizations profitable is the capital structure with the optimal mix of debt and equity. Unfortunately, previous literature has reported this relationship with a mixed trend, which may be due to research gaps in the statistical analysis. Moreover, it also shows that the relationship between them has not yet been fully predicted and can still be completely understood. This study contains time-variant and time-invariant variables, and these variables usually have an outlier's problem. As we know that the OLS estimators are more sensitive to react adversely to this problem, yet we have not received enough evidence from similar researches that cares about it. Consistent with these arguments, this study focuses primarily on exploring the influence of corporate governance structure and the capital structure on firms' market-oriented and accounting-based performance, especially with the contemplation of outliers. Hypotheses have been evaluated using M-estimators and S-estimators of robust regression for 45 listed firms for the period from 2013 to 2017. The findings reveal that the governance structure of firms with BOD, independent director, institutional investors, audit committee and female directors accelerates its performance. Further, we find that the leverage ratio improves accounting performance, but it has a downward impact on the share prices of listed firms. Our study contributes to the prevailing literature by proving that the kind of governance structure that based on diverse expert members and a capital structure with a high volume of debt is of utmost importance to the performance of firms as a whole.

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Section: Corporate Governance Structure and Firms Performancesmentioning

confidence: 99%

Do corporate governance structure and capital structure matter for the performance of the firms? An empirical testing with the contemplation of outliers

Wang

Ramzan

2020

PLoS ONE

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“…The test results show that the corporate governance index has a positive effect on stock return. The results of these studies were confirmed by Rogers, Riberio, and Securato (2008); Parigi, Pelizon and von Thadden (2013); and Teker and Yuksel (2014). The results of these studies indicate that governance is considered positive by the market.…”

mentioning

confidence: 54%

The Impact of Public Ownership as Antecedent Variable on Corporate Governance Effectiveness: Indonesian Case.

Winardi¹,

Laksmana²,

Rachmawati³

2017

IJAR

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“…Empirical evidence finds a direct correlation between good CG and the firm's share prices in Pakistan, as well as that different levels of CG have different links with the firm's share prices and performance (PeiZhi and Ramzan, 2020). Teker and Yüksel (2014) observe a sharp positive movement in share prices on the first day of the announcement in Turkey.…”

Section: Literature Reviewmentioning

confidence: 87%

The moderating and mediating effects of corporate governance and capital structure on firm performance: empirical evidence from an emerging market

Ronoowah¹,

Seetanah²

2023

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PurposeThis study aims to focus on the direct, mediating and moderating effects of corporate governance (CG) and capital structure (CS) in their relationships with firm performance (FP).Design/methodology/approachMultivariate panel data regression techniques are employed to analyse the direct, mediating and moderating impacts of the CG and CS on FP of 38 listed Mauritian non-financial companies from 2009 to 2019.FindingsThis study shows that CG has a positive but insignificant influence on return on equity (ROE) and Tobin's Q. CS has a significant negative impact on both ROE and Tobin's Q and supports the pecking order theory (POT). The interaction of CG and CS influences FP, but the strength of the moderating effects depends on the performance measure being used. Both CS and CG have no mediation effects in their relationship with FP measured by ROE and Tobin's Q.Practical implicationsThe results indicate that the combination of the high leverage ratio and good governance practices of companies can improve FP and increases investor confidence resulting in a positive reaction on their market share prices.Originality/valueThis paper contributes to the CG and CS literature by introducing a more precise and comprehensive research approach and is the first to attempt to extend CG and CS in their associations with FP by incorporating both CG and CS as profound moderator and mediator variables simultaneously in the same study.

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Stock Price Reaction for Scoring on Corporate Governance

Cited by 4 publications

References 5 publications

Do corporate governance structure and capital structure matter for the performance of the firms? An empirical testing with the contemplation of outliers

Do corporate governance structure and capital structure matter for the performance of the firms? An empirical testing with the contemplation of outliers

The Impact of Public Ownership as Antecedent Variable on Corporate Governance Effectiveness: Indonesian Case.

The moderating and mediating effects of corporate governance and capital structure on firm performance: empirical evidence from an emerging market

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