We gratefully acknowledge the comments from an anonymous referee and the editor, Frederick Choi. We would also like to thank Amar Gill for providing us with CLSA Corporate Governance Score.
Corporate Governance, Investment, and Firm Valuation in Asian Emerging Markets
Article first published online: 13 SEP 2011
© 2011 Blackwell Publishing Ltd.
Journal of International Financial Management & Accounting
Volume 22, Issue 3, pages 246–273, Autumn 2011
How to Cite
Cheung, Y.-L., Stouraitis, A. and Tan, W. (2011), Corporate Governance, Investment, and Firm Valuation in Asian Emerging Markets. Journal of International Financial Management & Accounting, 22: 246–273. doi: 10.1111/j.1467-646X.2011.01051.x
- Issue published online: 13 SEP 2011
- Article first published online: 13 SEP 2011
We investigate the effects of corporate governance and family ownership on firm valuation through investment efficiency in Asian emerging markets. Using 3 years of time series data from the Credit Lyonnais Securities Asia corporate governance score for 10 Asian emerging markets, we find that good corporate governance leads to better or more efficient investment decisions and eventually to higher firm value. We also find that investors reward firms for improvement in corporate governance. The findings do not hold for Asian firms with a family or concentrated ownership structure. The results are not driven by changes in accounting standards in these markets.