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Governance mechanisms, simultaneity and firm value in Australia

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  • Lukas Y. Setia-Atmaja

Abstract

This study examines whether firms determine governance mechanisms such as dividend, board independence, board size and debt simultaneously, and whether firm value is associated with these mechanisms. Using panel data on a sample of Australian publicly listed firms over the period 2000-2005 (1530 firm-year observations), the study finds that dividends, board independence, board size and debt are jointly determined. The research also finds that board independence is positively associated with firm value. In contrast, debt appears to be negatively associated with firm value, while dividend and board size are not significantly related to firm value. For policy makers, the findings could serve to justify initiatives to encourage more independent directors on boards.

Suggested Citation

  • Lukas Y. Setia-Atmaja, 2009. "Governance mechanisms, simultaneity and firm value in Australia," International Journal of Corporate Governance, Inderscience Enterprises Ltd, vol. 1(3), pages 241-258.
    • Handle: RePEc:ids:ijcgov:v:1:y:2009:i:3:p:241-258
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    Cited by:

    1. Geeta Duppati & Narendar V. Rao & Neha Matlani & Frank Scrimgeour & Debasis Patnaik, 2020. "Gender diversity and firm performance: evidence from India and Singapore," Applied Economics, Taylor & Francis Journals, vol. 52(14), pages 1553-1565, March.
    2. Mohit Pathak & Arti Chandani, 2023. "Board composition, executive compensation, and financial performance: panel evidence from India," International Journal of Disclosure and Governance, Palgrave Macmillan, vol. 20(4), pages 359-373, December.

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