The impact of corporate governance on corporate performance: evidence from japan

R.M.M.J. Bauer, B.P.M. Frijns, R.R.A.E. Otten, A. Tourani Rad

Research output: Contribution to journalArticleAcademicpeer-review

30 Citations (Scopus)

Abstract

Employing a unique data set provided by governance metrics international, which rates firms using six different corporate governance dimensions, we analyze whether japanese firms with many governance provisions have a better corporate performance than firms with few governance provisions. Employing an overall index, we find that well-governed firms significantly outperform poorly governed firms by up to 15% a year. Using indices for various governance categories, we find that not all categories affect corporate performance. Governance provisions that deal with financial disclosure, shareholder rights, and remuneration do affect stock price performance. The impact of provisions that deal with board accountability, market for control, and corporate behavior is limited.
Original languageEnglish
Pages (from-to)236-251
Number of pages16
JournalPacific - Basin Finance Journal
Volume16
Issue number3
DOIs
Publication statusPublished - 1 Jan 2008

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