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Examining the Effects of Non-Bound Board members and Ownership Structure as Corporate governance Mechanisms on Firm Value

Author

Listed:
  • Hashem Valipour

    (Islamic Azad University)

  • Javad Moradi

    (Islamic Azad University)

  • Ladan Zare

    (Islamic Azad University)

Abstract

Corporate governance mechanisms were generated, due to a conflict of interest between owners and managers and to eliminate the problems of representation and assured shareholders that their funds will not be wasted because of investing on non-profit activities. Improving corporate governance is effective in reducing agency costs and leads to increase the value of the company. This study investigates the effects of corporate governance mechanisms of benefit sharing, different kinds of ownership structure and board on firm value. In this study, the role of the non-bound members moderating barrier with different ownership structure and their impact on the firm value is examined. In order to reach the mentioned goal, a 9 year period (1380-1388) was considered which ultimately 123 companies of Tehran Stock Exchange member firms were selected in this study. The type of this research is Descriptive – correlation study and statistical method which is used for testing the hypotheses of research is "panel data". The results show that governmental ownership, managerial ownership and non-bound members of the board have significant positive impact on the value of company. The results also show that increasing the number of non-bound board members companies cause to increase and improvement the relationship between the governmental ownership, managerial ownership and the value of firm.

Suggested Citation

  • Hashem Valipour & Javad Moradi & Ladan Zare, 2012. "Examining the Effects of Non-Bound Board members and Ownership Structure as Corporate governance Mechanisms on Firm Value," International Journal of Academic Research in Accounting, Finance and Management Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Accounting, Finance and Management Sciences, vol. 2(2), pages 55-68, April.
    • Handle: RePEc:hur:ijaraf:v:2:y:2012:i:2:p:55-68
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    References listed on IDEAS

    as
    1. Omran, Mohammed M. & Bolbol, Ali & Fatheldin, Ayten, 2008. "Corporate governance and firm performance in Arab equity markets: Does ownership concentration matter?," International Review of Law and Economics, Elsevier, vol. 28(1), pages 32-45, March.
    2. Chi, Jianxin Daniel & Scott Lee, D., 2010. "The conditional nature of the value of corporate governance," Journal of Banking & Finance, Elsevier, vol. 34(2), pages 350-361, February.
    3. Ammann, Manuel & Oesch, David & Schmid, Markus M., 2011. "Corporate governance and firm value: International evidence," Journal of Empirical Finance, Elsevier, vol. 18(1), pages 36-55, January.
    4. Yves Bozec & Richard Bozec & Mohamed Dia, 2010. "Overall governance, firm value and deviation from one share: one vote principle," International Journal of Managerial Finance, Emerald Group Publishing Limited, vol. 6(4), pages 305-328, September.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Corporate governance; firm value; ownership structure; non-bound board members;
    All these keywords.

    JEL classification:

    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance

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