The effect of corporate governance on firm value and profitability: time-series evidence from Turkey
Ararat, Melsa and Black, B. S. and Yurtoğlu, B. B. The effect of corporate governance on firm value and profitability: time-series evidence from Turkey.
Official URL: http://www.journals.elsevier.com/emerging-markets-review
We study the corporate governance practices of Turkish public firms from 2006 to 2012, relying on hand-collected data covering the vast majority of listed firms. We build a Turkey Corporate Governance Index, TCGI, composed of subindices for board structure, board procedure, disclosure, ownership, and shareholder rights. TCGI predicts higher market value (with firm fixed effects) and higher firm-level profitability with firm random effects. The principal driver of higher market value and profitability is disclosure subindex. We also study the determinants of firms' governance and find that most firm specific factors have little effect on firms’ governance choices.
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