The Effect of Corporate Governance on Firm Value with Emphasis on Investment Efficiency

The aim of this research is to investigate impact of corporate governance mechanisms including percentage of institutional ownership، managerial ownership percentage، percentage of free float share، and board independence on the value of the company''s with emphasis on investment efficiency of companies listed at Tehran Stock Exchange (TSE). Tobin''s Q is used as a measure of firm value. For measuring the investment efficiency، we used Verdi model (2006)، we control the effects of three variables such as firm size، leverage and liquidity ratio that we expected have effect on the relationship between the dependent and independent variables. The study population included 132 active companies in the Tehran Stock Exchange (TSE). The scope of the study includes a six-year period since 2007-2012 based on the financial statements. Panel data regression analysis has been used to test hypotheses of the study. The results suggest that corporate governance mechanisms have no effect on firm value and investment efficiency. Also، corporate governance mechanisms have no effect on the relationship between investment efficiency and firm value.