This study aims to explore the effects of reform in internal corporate governance mechanisms issued by Bangladesh Securities and Exchange Commission in 2012 (specially changes made in appointments of independent directors to the board) on firm performance for a sample of 45 non-financial listed firms on Dhaka Stock Exchange (DSE) during 2010-2015, splitting into two periods (pre-reform periods: 2010-2012; and post-reform periods: 2013-2015). This study is highly concerned to control for any possible endogeneity problem inherent in OLS regression model. Therefore, satisfying endogeneity and over-identification tests collected data are finally analyzed by OLS regression model rather than 2SLS regression model since no statistical evidence of using 2SLS regression model was found in Hausman test results. In this study, after controlling for firm specific factors, internal corporate governance mechanisms such as board size, board independence, and CEO duality are found to have significant effects on both accounting based performance measures and market based performance measure of firm during the post-reform periods; larger boards are negatively associated with firm performance; board independence is strongly and positively associated with all measures of firm performance; and CEO duality is significantly and negatively related to the accounting based performance measures.
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