Does corporate governance predict future performance? Evidence from Hong Kong

Author(s)
Author(s)
Connelly, J. T.
Jiang, P.
Limpaphayom, P.
Date Issued
2011
Publisher
John Wiley & Sons
Journal
Financial Management
Volume
40
Issue
1
Start page
159
End page
197
Abstract
This study uses time-series data to examine the relation between changes in the quality of corporate governance practices and subsequent market valuation among large listed companies in Hong Kong. The results indicate that firms that exhibit improvements in the quality of corporate governance display a subsequent increase in market valuation, whereas firms that exhibit deterioration in the quality of corporate governance practices tend to encounter a decline in market valuation. Additionally, the impact is greater for firms that are included in the MSCI index or with a China affiliation. The results provide evidence in support of the notion that good corporate governance can predict future market valuation.
URI
DOI
SFU Affiliated Publication
No
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