Volume 14, Number 2, December 2019
| A Comprehensive Framework for Empirical Research on the Relationship between Corporate Governance and Corporate Performance |
Abstract
The present study primarily discusses the effect of corporate governance (CG) on corporate performance (CP), where CP comprises corporate value (CV) and financial performance. Extant literature typically examined individual CG variables or the influences that specific CG dimensions have on CP. In actuality, CG comprises numerous dimensions. The selection of specific variables as proxy variables may fail to accurately and comprehensively reflect the correlation between CG and CP. Therefore, the present study endeavored to develop a more comprehensive CG assessment framework to serve as decision-making reference for managers and investors. Subsequent findings indicated that CG positively influenced CP. These results were consistent in both an overall analysis and several periodic analyses. Findings relating to the influences of various CG dimensions on CP indicated that ownership structure, fair treatment of shareholders, and board of director (BD) structure can be utilized to enhance CP.
Keywords: Corporate Governance, Corporate Value, Financial Performance
JEL Classification: L20, L25, M14