The Deterioration of Financial Ratios During the Covid-19 Pandemic: Does Corporate Governance Matter?

Musa Hussam (), Rech Frederik (), Yan Chen () and Musova Zdenka ()
Additional contact information
Musa Hussam: Department of Finance and Accounting, Faculty of Economics, Matej Bel University, Slovakia
Rech Frederik: Department of Accounting, Dongbei University of Finance and Economics, China
Yan Chen: Department of Accounting, Dongbei University of Finance and Economics, China
Musova Zdenka: Department of Corporate Economics and Management, Faculty of Economics, Matej Bel University, Slovakia

Folia Oeconomica Stetinensia, 2022, vol. 22, issue 1, 219-242

Abstract: Research background: Corporate governance plays an important role in companies’ financial performance and its true importance and relevance are revealed during an economic shock, such as the COVID-19 pandemic. In the past, research regarding corporate governance and financial variables focused solely on performance variables such as Tobin’s Q and ROA. This assessment completely ignores that corporate governance principles have a broader implication on financial variables than only performance. Purpose: Our research aimed to determine whether companies with good corporate governance practices were more resilient during the COVID-19 pandemic, measured by the deterioration of various financial variables. Research methodology: To achieve the aim, in the empirical part of the article, information on companies’ corporate governance and financial variables was collected, and based on them, correlation, regression and scatter plot analyses were conducted. Results: Our correlation, regression, and scatter plot analyses revealed that on both group and individual company levels, companies with higher levels of corporate governance would have their financial variables deteriorate significantly more compared to companies with low levels of compliance. Novelty: This is the first publication on the given topic. While few publications are assessing the impact of the pandemic on companies using corporate governance, none of these publications have focused on financial variables.

Keywords: Corporate Governance; Corporate Governance Index; COVID-19 pandemic; Bratislava Stock Exchange (search for similar items in EconPapers)
JEL-codes: G19 G28 G30 G34 (search for similar items in EconPapers)
Date: 2022
References: Add references at CitEc
Citations:

Downloads: (external link)
https://doi.org/10.2478/foli-2022-0011 (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:vrs:foeste:v:22:y:2022:i:1:p:219-242:n:4

DOI: 10.2478/foli-2022-0011

Access Statistics for this article

Folia Oeconomica Stetinensia is currently edited by Waldemar Tarczyński

More articles in Folia Oeconomica Stetinensia from Sciendo
Bibliographic data for series maintained by Peter Golla ().