The effect of corporate governance on firm value and profitability: Time-series evidence from Turkey

Melsa Ararat, Bernard Black and Burcin Yurtoglu

Emerging Markets Review, 2017, vol. 30, issue C, 113-132

Abstract: We study the corporate governance practices of Turkish public firms from 2006 to 2012, relying on hand-collected data covering the vast majority of listed firms. We build a Turkey Corporate Governance Index, TCGI, composed of subindices for board structure, board procedure, disclosure, ownership, and shareholder rights. TCGI predicts higher market value (with firm fixed effects) and higher firm-level profitability with firm random effects. The principal subindex which predicts higher market value and profitability, and drives the results for TCGI as a whole, is disclosure subindex. We also study the determinants of firms' governance and find that most firm-specific factors have little effect on firms' governance choices.

Keywords: Turkey; Corporate governance; Governance index (search for similar items in EconPapers)
JEL-codes: G18 G30 G34 G39 K22 K29 (search for similar items in EconPapers)
Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (33)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ememar:v:30:y:2017:i:c:p:113-132

DOI: 10.1016/j.ememar.2016.10.001

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