Investment opportunity set, corporate governance practices and firm performance
By M. Hutchinson, Ferdinand A. Gul. 2004
373 citations recorded by the source corpus.
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.
Subfields: Accounting
View Paper: https://www.semanticscholar.org/paper/a21cc9be838bcc50973db023d7572634c2103b4c
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Citations in the corpus
- Does the type of ownership control matter? Evidence from China's listed companies (2009, background): “In addition, firm performance can be influenced by the investment opportunity set (IOS) it faces (Hutchinson and Gul, 2003).”
- Shari’ah supervision, corporate governance and performance : conventional vs. Islamic banks (2015, background): “5 Hutchinson and Gul (2004) and Gani and Jermias (2006) have implemented similar measures in their studies.”
- Does corporate governance quality affect default risk? The role of growth opportunities and stock liquidity (2018, methodology): “Therefore, high growth firms are associated with higher shareholder/manager agency costs, and are in great need for corporate controls (Hutchinson and Gul, 2004).”
- Do board characteristics drive firm performance? An international perspective (2019, background): “The agency theory focuses precisely on the supervisory and control function of the board of directors (Gul and Leung 2004; Hutchinson and Gul 2004; Jermias 2007; Tsui et al. 2001).”
- Does corporate governance explain dividend policy in Sub‐Saharan Africa? (2013, background): “Consequently, a system of corporate governance is introduced, which discourages managers from pursuing objectives that fail to maximize shareholder wealth (Hutchinson and Gul, 2004).”