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Relationship between Corporate Governance Score and Stock Prices: Evidence from KSE- 30 Index Companies

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  • Malik, Saif Ullah

Abstract

The price of stock like any other commodity goes up and down due to a number of factors. Corporate governance is one of important determinants of stock price. This paper makes an attempt to study exclusively the relationship between corporate governance score and stock prices of a company. The research involves a study of the KSE - 30 index companies. The independent variable (Corporate governance score) and dependent variable (company’s share price) have identified for the two years 2009 and 2010. In the analysis our hypothesis corporate governance score and stock prices is significant. Hence, this study concludes that better governed firms have higher stock prices and vice versa. This is due to the fact that better managed firms will perform better and as result stock prices will increase.

Suggested Citation

  • Malik, Saif Ullah, 2012. "Relationship between Corporate Governance Score and Stock Prices: Evidence from KSE- 30 Index Companies," MPRA Paper 44475, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:44475
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    References listed on IDEAS

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    More about this item

    Keywords

    Corporate governance; Stock Prices; Board Independence; Expertise of Audit committee; Remuneration Committee; Nomination Committee; CEO Duality; Existence of Audit committee;
    All these keywords.

    JEL classification:

    • G12 - Financial Economics - - General Financial Markets - - - Asset Pricing; Trading Volume; Bond Interest Rates
    • G30 - Financial Economics - - Corporate Finance and Governance - - - General

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