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Corporate Governance and Firm Valuation in Asian Emerging Markets

In: Corporate Governance in Emerging Markets

Author

Listed:
  • Yan-Leung Cheung

    (The Hong Kong Institute of Education)

  • J. Thomas Connelly

    (Chulalongkorn University)

  • Jesus P. Estanislao

    (Philippines Institute of Corporate Directors)

  • Piman Limpaphayom

    (Portland State University and Sasin GIBA of Chulalongkorn University)

  • Tong Lu

    (Chinese Academy of Social Sciences)

  • Sidharta Utama

    (Indonesian Institute for Corporate Directorship and University of Indonesia)

Abstract

One of the most contentious issues in the corporate governance debate is the presumed benefits of adopting internationally accepted corporate governance practices. This study investigates the relation between the quality of corporate governance practices and market valuation for listed firms in five Asian economies: China, Hong Kong, Indonesia, the Philippines, and Thailand. Based on the OECD Corporate Governance Principles (Organization of Economic Co-operation and Development, 1999), we use a survey instrument to assess the quality of corporate governance practices of listed companies in these Asian emerging markets. The new instrument represents an improvement over existing instruments as it is more comprehensive, covering five aspects of corporate governance (rights of shareholders, treatment of shareholders, roles of stakeholders, disclosure and transparency, and board responsibilities). The survey instrument also captures variation in the quality of governance practices across firms. The empirical results show there is a positive relation between the quality of corporate governance practices and firm value in each of the five nations.

Suggested Citation

  • Yan-Leung Cheung & J. Thomas Connelly & Jesus P. Estanislao & Piman Limpaphayom & Tong Lu & Sidharta Utama, 2014. "Corporate Governance and Firm Valuation in Asian Emerging Markets," CSR, Sustainability, Ethics & Governance, in: Sabri Boubaker & Duc Khuong Nguyen (ed.), Corporate Governance in Emerging Markets, edition 127, pages 27-53, Springer.
    • Handle: RePEc:spr:csrchp:978-3-642-44955-0_2
    DOI: 10.1007/978-3-642-44955-0_2
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    Citations

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    Cited by:

    1. Leo Vashkor Dewri & Md. Rashidul Islam & Fatema-Tuz-Johra & M Mizanur Rahman, 2021. "Measuring Firms Intrinsic Values in an Emerging Economy: Evidence from Bangladesh," Asian Economic and Financial Review, Asian Economic and Social Society, vol. 11(6), pages 429-445, June.
    2. David H.M. Hasibuan & Khomsiyah ., 2019. "Do Corporate Social Responsibility and Corporate Governance Affect Tax Aggressiveness? Evidence from Indonesia," Journal of Accounting, Business and Finance Research, Scientific Publishing Institute, vol. 7(1), pages 8-16.
    3. Miranda Tanjung, 2020. "A cross-firm analysis of corporate governance compliance and performance in Indonesia," Managerial Auditing Journal, Emerald Group Publishing Limited, vol. 35(5), pages 621-643, February.
    4. Abdallah, Abed Al-Nasser & Ismail, Ahmad K., 2017. "Corporate governance practices, ownership structure, and corporate performance in the GCC countries," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 46(C), pages 98-115.
    5. Connelly, J. Thomas & Limpaphayom, Piman & Nguyen, Hien T. & Tran, Thanh D., 2017. "A tale of two cities: Economic development, corporate governance and firm value in Vietnam," Research in International Business and Finance, Elsevier, vol. 42(C), pages 102-123.
    6. McGuinness, Paul B. & Vieito, João Paulo & Wang, Mingzhu, 2017. "The role of board gender and foreign ownership in the CSR performance of Chinese listed firms," Journal of Corporate Finance, Elsevier, vol. 42(C), pages 75-99.
    7. Zhipeng Zang & Qiwei Zhu & Helena Mogorrón-Guerrero, 2019. "How Does R&D Investment Affect the Financial Performance of Cultural and Creative Enterprises? The Moderating Effect of Actual Controller," Sustainability, MDPI, vol. 11(2), pages 1-19, January.

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