Empirical Evidence on Corporate Governance and Corporate Performance in Tunisia


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Recent high-profile corporate failures in the US and elsewhere in the world, many of which were caused by, or at least exacerbated by, weak governance practices, have convinced an increasing number of once sceptical investors that governance is a separate risk class that certainly requires attention and, in many cases, expert analysis. In this paper we examine corporate governance in Tunisia, North Africa, by analysing the board, the ownership structures and the financial market. By using a panel data set of 24 firms listed on the Tunisian Stock Exchange for the period 2000 to 2005, we provide evidence that governance in Tunisian firms is characterised by strong blockholders (often including families). Moreover, firms can choose between a dual board and a monist board. Our estimates show that Tunisian governance is weak. Finally we provide evidence for a strong relationship between governance and corporate performance.