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VOL. 7, ISSUE 2 (2025)
Corporate governance mechanisms and firm value: Evidence from emerging market
Authors
Dr. Suman
Abstract
This study examines the influence of corporate governance mechanisms on firm value within the context of emerging markets, where institutional frameworks, regulatory environments, and ownership structures differ substantially from those in developed economies. Drawing on agency theory and resource dependence perspectives, the research investigates how board characteristics, ownership concentration, audit quality, and shareholder protection practices contribute to enhancing or diminishing firm value. Using a panel dataset of publicly listed firms across selected emerging economies from 2010 to 2023, the study employs robust econometric techniques—including fixed-effects models and generalised method of moments—to address endogeneity and heterogeneity concerns. The findings reveal that strong governance mechanisms, particularly board independence and higher audit quality, are positively associated with firm value. The effect of ownership concentration is nonlinear, suggesting that while moderate concentration enhances monitoring efficiency, excessively concentrated ownership may lead to entrenchment and reduced value creation. The study also highlights the moderating role of institutional quality, demonstrating that governance mechanisms tend to be more effective in countries with stronger legal and regulatory frameworks. These results offer meaningful implications for policymakers, investors, and corporate managers seeking to strengthen governance structures and improve market performance. Overall, the study contributes to the growing literature by providing comprehensive, cross-country evidence on the governance–value nexus in emerging markets.
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Pages:65-71
How to cite this article:
Dr. Suman "Corporate governance mechanisms and firm value: Evidence from emerging market". International Journal of Commerce and Economics, Vol 7, Issue 2, 2025, Pages 65-71
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