Corporate Governance and Firm Value: Evidence from South African (SA) Listed Firms

51 Pages Posted: 17 Jul 2011

See all articles by Collins G. Ntim

Collins G. Ntim

University of Southampton Business School, UK; University of Southampton

Kwaku K. Opong

University of Glasgow - Adam Smith Business School

Jo Danbolt

University of Edinburgh Business School

Date Written: December 12, 2009

Abstract

This paper investigates the relationship between a broad corporate governance (CG) index and firm value (Tobin’s Q) using a sample of 169 South African (SA) listed firms between 2002 and 2006. Consistent with the results of prior studies, we find a statistically significant and positive association between good CG practices and firm value. In a series of sensitivity analyses, we find that our results are robust to endogeneity and/or the existence of alternative CG mechanisms, different firm value proxies, alternative CG weighting scheme and firm-level fixed effects. Distinct from past studies, we further examine the link between complying with SA context specific stakeholder CG provisions and firm value. In line with political cost and resource dependence theories, our results reveal a statistically significant and positive nexus between compliance with stakeholder CG provisions and firm value.

Keywords: corporate governance, firm value, affirmative action and stakeholder, provisions, South Africa (SA), King II

JEL Classification: G12, G34, G38

Suggested Citation

Ntim, Collins G. and Opong, Kwaku K. and Danbolt, Jo, Corporate Governance and Firm Value: Evidence from South African (SA) Listed Firms (December 12, 2009). Available at SSRN: https://ssrn.com/abstract=1884291 or http://dx.doi.org/10.2139/ssrn.1884291

Collins G. Ntim (Contact Author)

University of Southampton Business School, UK ( email )

Southampton Business School
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Southampton, England SO17 IBJ
United Kingdom
+44 (0) 238059 4285 (Phone)
+44 (0) 238059 3844 (Fax)

HOME PAGE: http://www.southampton.ac.uk/business-school/about/staff/cgn1n11.page

University of Southampton ( email )

Southampton, SO17 1BJ
United Kingdom

Kwaku K. Opong

University of Glasgow - Adam Smith Business School ( email )

University Avenue
Gilbert Scott Building
Glasgow, Scotland G12 8QQ
United Kingdom

Jo Danbolt

University of Edinburgh Business School ( email )

University of Edinburgh
29 Buccleuch Place
Edinburgh, Scotland EH8 9JS
UNITED KINGDOM

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