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Impact of Corporate Governance Disclosures on Firm Performance

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  • Sudershan Kuntluru

    (Indian Institute of Management, Kozhikode)

Abstract

Corporate Governance disclosure practices are the subject of academic, professional and regulator debate. In this study, we examine the impact of corporate governance disclosures on firm performance in India. Unlike most of the existing literature, the corporate governance disclosures score is computed based on the Clause 49 of the listing agreements of SEBI for the period 2006-2016. It is a handpicked data from the annual reports disclosures made under the corporate governance section. We apply fixed effect regression model to examine the impact of corporate governance disclosures on firm performance. The performance is measured in in terms of operating, financial and market performance. It is found that corporate governance disclosures have positive and significant impact on market performance of the firms. Thus, the companies that comply with regulatory requirements of corporate governance disclosures achieve higher market performance. The study also finds that corporate governance disclosures have positive impact on firm’s operating performance and a negative impact on firm’s financial performance. The findings are useful to policy makers, managers, analysts and investors and also provide scope for future research.

Suggested Citation

  • Sudershan Kuntluru, 2019. "Impact of Corporate Governance Disclosures on Firm Performance," Working papers 331, Indian Institute of Management Kozhikode.
    • Handle: RePEc:iik:wpaper:330
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    References listed on IDEAS

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    1. Stefan Beiner & Wolfgang Drobetz & Markus M. Schmid & Heinz Zimmermann, 2006. "An Integrated Framework of Corporate Governance and Firm Valuation," European Financial Management, European Financial Management Association, vol. 12(2), pages 249-283, March.
    2. Scott W. Barnhart & M. Wayne Marr & Stuart Rosenstein, 1994. "Firm performance and board composition: Some new evidence," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 15(4), pages 329-340, July/Augu.
    3. Asish K. Bhattacharyya & Sadhalaxmi Vivek Rao, 2005. "Economic Impact of 'Regulation on Corporate Governance': Evidence from India," Finance 0504002, University Library of Munich, Germany.
    4. Black, Bernard, 2001. "The corporate governance behavior and market value of Russian firms," Emerging Markets Review, Elsevier, vol. 2(2), pages 89-108, June.
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    Cited by:

    1. Tutun Mukherjee & Som Sankar Sen, 2022. "Impact of CEO attributes on corporate reputation, financial performance, and corporate sustainable growth: evidence from India," Financial Innovation, Springer;Southwestern University of Finance and Economics, vol. 8(1), pages 1-50, December.

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    More about this item

    Keywords

    Market Performance; Corporate Governance disclosures; Firm performance; Clause 49; SEBI; India;
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