Examining the Effects of Non-Bound Board members and Ownership Structure as Corporate governance Mechanisms on Firm Value

Hashem Valipour (), Javad Moradi () and Ladan Zare ()
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Hashem Valipour: Islamic Azad University
Javad Moradi: Islamic Azad University
Ladan Zare: Islamic Azad University

International Journal of Academic Research in Accounting, Finance and Management Sciences, 2012, vol. 2, issue 2, 55-68

Abstract: Corporate governance mechanisms were generated, due to a conflict of interest between owners and managers and to eliminate the problems of representation and assured shareholders that their funds will not be wasted because of investing on non-profit activities. Improving corporate governance is effective in reducing agency costs and leads to increase the value of the company. This study investigates the effects of corporate governance mechanisms of benefit sharing, different kinds of ownership structure and board on firm value. In this study, the role of the non-bound members moderating barrier with different ownership structure and their impact on the firm value is examined. In order to reach the mentioned goal, a 9 year period (1380-1388) was considered which ultimately 123 companies of Tehran Stock Exchange member firms were selected in this study. The type of this research is Descriptive – correlation study and statistical method which is used for testing the hypotheses of research is "panel data". The results show that governmental ownership, managerial ownership and non-bound members of the board have significant positive impact on the value of company. The results also show that increasing the number of non-bound board members companies cause to increase and improvement the relationship between the governmental ownership, managerial ownership and the value of firm.

Keywords: Corporate governance; firm value; ownership structure; non-bound board members (search for similar items in EconPapers)
JEL-codes: G32 G34 (search for similar items in EconPapers)
Date: 2012
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