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Corporate governance and firm performance relationship: Implications for risk‐adjusted return behavior
Author(s) -
Dash Saumya Ranjan,
Raithatha Mehul
Publication year - 2019
Publication title -
managerial and decision economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.288
H-Index - 51
eISSN - 1099-1468
pISSN - 0143-6570
DOI - 10.1002/mde.3080
Subject(s) - corporate governance , business , panel data , stock (firearms) , accounting , risk–return spectrum , economics , financial economics , finance , monetary economics , econometrics , portfolio , mechanical engineering , engineering
We examine the impact of corporate governance on firm performance and stock return behavior using panel data for Indian listed firms for 2006 to 2015. Our results suggest that corporate governance improves firm performance. However, corporate governance information fails to provide excess risk‐adjusted returns to investors, as governance information is well assimilated in prevailing stock prices. In addition to extending the scant literature focused on emerging markets, our findings will prove useful to investors, fund managers, and rating agencies in making investment decisions and regulators in assessing the impact of governance norms.