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Investment opportunity set, corporate governance practices and firm performance

journal contribution
posted on 2004-09-01, 00:00 authored by M Hutchinson, Ferdinand Gul
Prior research on the relationship between corporate controls and firm performance is premised on the notion that, in theory, there is direct association between corporate governance and firm performance. However, extensive research has produced mixed and often weak results. In this paper, we posit, as a primary relationship, a negative association between growth and firm performance and then examine whether corporate governance variables moderate this negative relationship. Our results support this notion and show that the role of corporate governance variables in firm performance should be evaluated in the context of the firm’s external environment measured in this study in terms of growth opportunities.

History

Journal

Journal of corporate finance

Volume

10

Issue

4

Pagination

595 - 614

Publisher

Elsevier

Location

Amsterdam, The Netherlands

ISSN

0929-1199

Language

eng

Publication classification

C Journal article; C1.1 Refereed article in a scholarly journal

Copyright notice

2003, Elsevier B.V.