Firm Investments and Corporate Governance in Asian Emerging Markets

Tanweer Hasan (), Palani-Rajan Kadapakkam and P. C. Kumar
Additional contact information
Tanweer Hasan: Roosevelt University, U.S.A.
Palani-Rajan Kadapakkam: University of Texas at San Antonio, U.S.A.
P. C. Kumar: American University, U.S.A.

Multinational Finance Journal, 2008, vol. 12, issue 1-2, 21-44

Abstract: The quality of corporate governance has been shown to have wide-ranging implications, e.g., on the performance of stock markets and on exchange rates. This study investigates whether the quality of corporate governance in a country impacts investment decisions made at the micro level of the firm. The study focuses on Asian emerging markets since they have widely varying standards of corporate governance. Based on eight measures of corporate governance, four aggregate indices of corporate governance (business environment, legal environment, investor rights, and an overall measure) are developed for seven countries in the sample drawing on data from published sources. The results indicate that improvements in corporate governance mitigate the dependency of firm investments on their internal resources and facilitate access by firms to capital markets.

Keywords: corporate governance; firm investments; emerging markets; investment-cashflow sensitivity (search for similar items in EconPapers)
JEL-codes: G15 G30 G31 (search for similar items in EconPapers)
Date: 2008
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:mfj:journl:v:12:y:2008:i:1-2:p:21-44

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