O'Connor, Thomas G.
(2015)
When does corporate governance
matter? Evidence from across
the corporate life-cycle.
Managerial Finance, 41 (7).
pp. 673-691.
ISSN 0307-4358
Abstract
Purpose – The purpose of this paper is to explore the relationship between corporate governance and
firm value at different stages of the corporate life-cycle.
Design/methodology/approach – The authors use two measures, commonly employed in the literature,
to differentiate between “immature” and “mature” firms, and estimate separate governance-value regressions
for each set of firms.
Findings – The findings suggest that it is differences in the resource/strategic governance functions,
which manifest in young firms which result in differences in value across firms, all else equal.
The authors find no relationship between governance and firm value for older firms. Hence, differences
in the monitoring aspect of governance between mature firms are not rewarded with a value premium.
Research limitations/implications – The findings imply that the strategic and resource roles of
governance are “must haves” for firms since firms that score highly on these fronts are valued more
highly. In contrast, differences in the monitoring aspect of governance are not rewarded, suggesting
that effective monitoring is not a necessity, but rather a “nice to have”. The analysis is limited to a
small sample of emerging market firms, and it would be of interest to extend this analysis to a larger
and broader sample of firms.
Originality/value – The findings suggest that corporate governance is not valued at all stages of the
corporate life-cycle.
| Item Type: |
Article
|
| Keywords: |
Corporate governance; Firm value; Emerging markets; Corporate life-cycle; |
| Academic Unit: |
Faculty of Social Sciences > Economics, Finance and Accounting |
| Item ID: |
8494 |
| Identification Number: |
https://doi.org/10.1108/MF-11-2013-0306 |
| Depositing User: |
Thomas G. O'Connor
|
| Date Deposited: |
25 Jul 2017 08:24 |
| Journal or Publication Title: |
Managerial Finance |
| Publisher: |
Emerald |
| Refereed: |
Yes |
| URI: |
|
| Use Licence: |
This item is available under a Creative Commons Attribution Non Commercial Share Alike Licence (CC BY-NC-SA). Details of this licence are available
here |
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