The relationship between corporate governance and firm financial performance: an empirical investigation of an emerging market

Amin, QA ORCID: https://orcid.org/0000-0002-7446-249X and Farquhar, SS, 2021. The relationship between corporate governance and firm financial performance: an empirical investigation of an emerging market. International Journal of Business Governance and Ethics, 15 (2), pp. 215-232. ISSN 1477-9048

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Abstract

We investigate whether the distinct nature of multinational firms (MNC) differently influence the governance-performance relationship compared to the local firms in Pakistan. We used a dynamic system GMM estimator that produces consistent and efficient estimation after controlling for dynamic endogeneity and simultaneity. Our results demonstrate that corporate governance (CG) has a significant positive impact on firm financial performance whilst CG practice of MNC firms is more effective than local firms in Pakistan. We observed two distinct financing behaviours, i.e., 'pro-active investment behaviour' of MNC firms and 'conservative investment behaviour' of local firms. We conclude that a well-established corporate culture, significant financial worth and firms' higher growth rate are key determinants of better CG practice.

Item Type:	Journal article
Publication Title:	International Journal of Business Governance and Ethics
Creators:	Amin, Q.A. and Farquhar, S.S.
Publisher:	Inderscience
Date:	2021
Volume:	15
Number:	2
ISSN:	1477-9048
Identifiers:	Number Type 10.1504/IJBGE.2021.113940 DOI 1823656 Other
Divisions:	Schools > Nottingham Business School
Record created by:	Laura Ward
Date Added:	27 Oct 2023 08:00
Last Modified:	27 Oct 2023 08:00
URI:	https://irep.ntu.ac.uk/id/eprint/50127

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