The impact of corporate governance on financial performance of Indian hotels: cluster analysis

Najib H.S. Farhan, Faozi A. Almaqtari, Mosab I. Tabash and Eissa A. Al-Homaidi

International Journal of Management Practice, 2022, vol. 15, issue 1, 24-58

Abstract: The current research aims to assess the influence of corporate governance practices on the financial performance of the Indian hotel industry. A panel dataset of 39 hotels listed on the Bombay Stock Exchange (BSE) was used, spanning the period of 2013 to 2016. One accounting-based measure and one marketing-based measure were used for measuring firms' profitability in the current study. Results revealed a statistically significant difference in the board of directors' size, audit committee size, audit committee diligence, and foreign ownership among the hotels' groups. Further, it was found that corporate governance practices have a significant influence on small hotels' profitability. However, only foreign ownership significantly affects the profitability of all hotel groups. The current study introduces useful insights on the impact of corporate governance practices on hotel firms' performance in India, which are very beneficial and vital to investors, practitioners, academicians, and policymakers in the tourism sector.

Keywords: corporate governance; firms' performance; hotel industry; Bombay Stock Exchange; BSE; cluster analysis. (search for similar items in EconPapers)
Date: 2022
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