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Corporate Governance Code Revisions, Corporate Social Performance and Firm Value: International Evidence

Author

Listed:
  • Chai-Aun Ooi

    (School of Economics, Finance and Banking, Universiti Utara Malaysia)

  • Chee-Wooi Hooy

    (School of Management, Universiti Sains Malaysia)

  • Jong-Seo Choi

    (School of Business, Pusan National University)

Abstract

This study investigates the impact of corporate governance code revisions on corporate social performance, and its’ moderating effect on the relationship between corporate social performance and firm value. This study applies the two-stage Heckman sample selection bias approach to tackle endogeneity issues. The sample includes public listed firms from 35 countries that have released their national codes of corporate governance from 2007-2014. Prior to the analysis, we read through the national codes of corporate governance, and find that a majority of the recently revised codes provide new recommendations related to corporate social responsibility. Based on the regression results, we find that progressive corporate governance code revisions are positively related to corporate social performance. In addition, the progressive revisions positively moderate the relationship between corporate social performance and firm value, which is shown in those firms having above-median positive correlation between their corporate governance score and the code revisions. The overall results are robust to industry-adjusted measure of corporate social performance. Furthermore, we find that firm age is important in explaining the moderating effect of corporate governance code revisions.

Suggested Citation

  • Chai-Aun Ooi & Chee-Wooi Hooy & Jong-Seo Choi, 2022. "Corporate Governance Code Revisions, Corporate Social Performance and Firm Value: International Evidence," Malaysian Journal of Economic Studies, Faculty of Business and Economics, University of Malaya & Malaysian Economic Association, vol. 59(1), pages 1-25, June.
    • Handle: RePEc:mjr:journl:v:59:y:2022:i:1:p:1-25
    DOI: 10.22452/MJES.vol59no1.1
    as

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    More about this item

    Keywords

    Corporate governance; code; corporate social responsibility; revision; firm value; Heckman;
    All these keywords.

    JEL classification:

    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation
    • G3 - Financial Economics - - Corporate Finance and Governance
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs

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