Economics and Business Review

Volume 5 (19) Number 4 pp. 70-89

Rupjyoti Saha1, Kailash Chandra Kabra1

Department of Commerce, North-Eastern Hill University, Shillong (Meghalaya)1

Does corporate governance influence firm performance? Evidence from India

Abstract:

Corporate Governance (CG) in India has undergone major transformation
in the recent past with the enactment of Companies Act, 2013 and revision of SEBI’s
Listing Agreement. Though some studies were undertaken in the Indian context few
conventional aspects of CG have been repetitively addressed with conflicting results.
The aim of this study is to examine the impact of some prominent CG attributes such
as board size, board independence, role duality, board’s gender diversity, ownership
concentration and audit committee independence on both market as well as accounting
based measures of firm performance (FP). To this end the study uses a sample
of top 100 non-financial and non-utility firms listed on the Bombay Stock Exchange
(BSE) for the period of 2014-2018 and employs two stage least square with instrumental
variables technique of estimation which takes into account potential endogeneity
in CG-FP relationship. The findings reveal a significant positive impact of board size,
ownership concentration and audit committee independence on market based measure
of FP while board independence is found to have a significant negative impact on
accounting based measure of FP. Moreover role duality and gender diversity are not
associated with FP. The outcome of this study highlights how the relationship between
CG and FP works in the unique institutional setting of India and it should be of interest
to regulators, practitioners and other market participants.

pub/2019_4_70.pdf Full text available in in Adobe Acrobat format:
http://www.ebr.edu.pl/volume19/issue4/2019_4_70.pdf
Keywords: corporate governance attributes, firm performance, endogeneity, India

DOI: 10.18559/ebr.2019.4.4

For citation:

MLA Saha, Rupjyoti, and Kailash Chandra Kabra. "Does corporate governance influence firm performance? Evidence from India ." Economics and Business Review EBR 19.4 (2019): 70-89. DOI: 10.18559/ebr.2019.4.4
APA Saha1, R., & Kabra2, K. C. (2019). Does corporate governance influence firm performance? Evidence from India . Economics and Business Review EBR 19(4), 70-89 DOI: 10.18559/ebr.2019.4.4
ISO 690 SAHA, Rupjyoti, KABRA, Kailash Chandra. Does corporate governance influence firm performance? Evidence from India . Economics and Business Review EBR, 2019, 19.4: 70-89. DOI: 10.18559/ebr.2019.4.4