Determination of the Effect of Corporate Governance on Financial Performance and Financial Distress in Firms Listed on Tehran Stock Exchange
Author(s):
Article Type:
Research/Original Article (بدون رتبه معتبر)
Abstract:
Purpose This paper aims to empirically examine the impact of quality of corporate governance (CG) practices on firm performance and financial distress. For this purpose, Iran country was selected as sample.
Design, methodology, approach To assess the level of CG practices at a given firm, the current study constructs corporate governance index (CGI) which consists of four dimensions: disclosure and transparency, composition of the board of directors, shareholders rights, and ownership and control structure. Based on a sample of 102 non-financial firms listed on the Tehran Stock Exchange, from 2009 to 2015, the effects of CG on performance and financial distress are assessed. Tobins Q, ROA and ROE were used to assess corporate performance. At the same time, the Altman Z-score is used as a financial distress indicator, as it measures financial distress inversely. The bigger the Z-score, the smaller the risk of financial distress.
Findings The results showed that the quality of corporate governance has significant effect on ROA, ROE and Q-tobin index. Also, the results showed that the quality of corporate governance has no significant effect on the financial crisis.
Design, methodology, approach To assess the level of CG practices at a given firm, the current study constructs corporate governance index (CGI) which consists of four dimensions: disclosure and transparency, composition of the board of directors, shareholders rights, and ownership and control structure. Based on a sample of 102 non-financial firms listed on the Tehran Stock Exchange, from 2009 to 2015, the effects of CG on performance and financial distress are assessed. Tobins Q, ROA and ROE were used to assess corporate performance. At the same time, the Altman Z-score is used as a financial distress indicator, as it measures financial distress inversely. The bigger the Z-score, the smaller the risk of financial distress.
Findings The results showed that the quality of corporate governance has significant effect on ROA, ROE and Q-tobin index. Also, the results showed that the quality of corporate governance has no significant effect on the financial crisis.
Keywords:
Language:
Persian
Published:
Journal of Development Evolution Management, Volume:10 Issue: 32, 2018
Pages:
81 to 88
magiran.com/p1836788
دانلود و مطالعه متن این مقاله با یکی از روشهای زیر امکان پذیر است:
اشتراک شخصی
با عضویت و پرداخت آنلاین حق اشتراک یکساله به مبلغ 1,390,000ريال میتوانید 70 عنوان مطلب دانلود کنید!
اشتراک سازمانی
به کتابخانه دانشگاه یا محل کار خود پیشنهاد کنید تا اشتراک سازمانی این پایگاه را برای دسترسی نامحدود همه کاربران به متن مطالب تهیه نمایند!
توجه!
- حق عضویت دریافتی صرف حمایت از نشریات عضو و نگهداری، تکمیل و توسعه مگیران میشود.
- پرداخت حق اشتراک و دانلود مقالات اجازه بازنشر آن در سایر رسانههای چاپی و دیجیتال را به کاربر نمیدهد.
In order to view content subscription is required
Personal subscription
Subscribe magiran.com for 70 € euros via PayPal and download 70 articles during a year.
Organization subscription
Please contact us to subscribe your university or library for unlimited access!