Size Really Matters: Further Evidence on the Negative Relationship between Board Size and Firm Value

NUS Business School Working Paper

Pacific-Basin Finance Journal (2005), Vol 13, 301-308

33 Pages Posted: 18 Mar 2002

See all articles by Yuen Teen Mak

Yuen Teen Mak

National University of Singapore (NUS) - Department of Accounting

Yuanto Kusnadi

Singapore Management University - School of Accountancy

Date Written: March 2002

Abstract

This study examines the impact of corporate governance mechanisms of Singapore and Malaysian firms on the Tobin's Q of these firms. We find little evidence of relationships between most corporate governance mechanisms and Tobin's Q. However, consistent with Yermack (1996) and Eisenberg et al. (1998), we find that there is an inverse relationship between board size and Tobin's Q in both countries. This suggests that the negative relationship between board size and firm value transcends different corporate governance systems.

Keywords: Board size, Firm value

JEL Classification: G30, G32

Suggested Citation

Mak, Yuen Teen and Kusnadi, Yuanto, Size Really Matters: Further Evidence on the Negative Relationship between Board Size and Firm Value (March 2002). NUS Business School Working Paper, Pacific-Basin Finance Journal (2005), Vol 13, 301-308, Available at SSRN: https://ssrn.com/abstract=303505 or http://dx.doi.org/10.2139/ssrn.303505

Yuen Teen Mak (Contact Author)

National University of Singapore (NUS) - Department of Accounting ( email )

BIZ2 Building, #03-32
1 Business Link
Singapore 119591
Singapore
+65 68743032 (Phone)
+ 65 67792083 (Fax)

Yuanto Kusnadi

Singapore Management University - School of Accountancy ( email )

60 Stamford Road
Singapore 178900
Singapore
+65 6808 5449 (Phone)

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