CORPORATE GOVERNANCE IN INDIA

Download This Article

Arunima Haldar, S.V.D. Nageswara Rao

DOI:10.22495/cocv12i1c2p6

Abstract

This paper examines the impact of Corporate Governance (CG) on Financial Performance considering the endogeneity between Corporate Governance and Firm Characteristics using a sample of large listed Indian firms over the period 2008 to 2011. We construct a "CG Index" using six important governance mechanisms covering a total of 44 parameters affecting the state of governance of Indian companies. The analysis of Corporate Governance Index for a period of four years found a rising trend in the level of the corporate governance practices of Indian companies. We then examine the relation of CG Index on firm characteristics using simultaneous equation modeling. Results show that there is a strong association between CG Index and the market performance of companies.

Keywords: Corporate Governance, Financial Performance, Corporate Governance Index, Simultaneous Equation Model and Endogeneity

How to cite this paper: Haldar, A., & Nageswara Rao, S. V. D. (2014). Corporate governance in India. Corporate Ownership & Control, 12(1-2), 287-297. http://doi.org/10.22495/cocv12i1c2p6