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Corporate Governance, Investment, and Firm Valuation in A sian Emerging Markets
Author(s) -
Cheung YanLeung,
Stouraitis Aris,
Tan Weiqiang
Publication year - 2011
Publication title -
journal of international financial management and accounting
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.818
H-Index - 37
eISSN - 1467-646X
pISSN - 0954-1314
DOI - 10.1111/j.1467-646x.2011.01051.x
Subject(s) - corporate governance , valuation (finance) , emerging markets , business , accounting , enterprise value , investment (military) , financial system , monetary economics , finance , economics , politics , political science , law
We investigate the effects of corporate governance and family ownership on firm valuation through investment efficiency in A sian emerging markets. Using 3 years of time series data from the C redit L yonnais S ecurities A sia corporate governance score for 10 A sian emerging markets, we find that good corporate governance leads to better or more efficient investment decisions and eventually to higher firm value. We also find that investors reward firms for improvement in corporate governance. The findings do not hold for Asian firms with a family or concentrated ownership structure. The results are not driven by changes in accounting standards in these markets.