Corporate governance stands for responsible business management geared towards long-term value creation. Prior research found significant relationship between asset composition (tangible versus intangible assets) and corporate governance disclosure practices of firms. However, there is very little research in the current Indian context. Hence, this paper explores such a relationship for firms listed on the Indian stock market by considering a sample that includes firms from nine different sectors, viz., metal, oil and gas, power, IT, FMCG, capital goods, auto, consumer durables and healthcare. It applies Corporate Governance and Disclosure (CGD) index as a proxy for firm-specific rating of governance quality and calculates CGD scores of sample firms listed on Bombay Stock Exchange (BSE). To identify intangible assets dominance in firms, the ratio of market value to book value and capital intensity of sample firms are calculated. Accordingly, firms are divided into tangible assets-dominated and intangible assets-dominated sectors. The findings reveal that there is no significant difference in the corporate governance and disclosure practices of firms across tangible asset- and intangible asset-dominated sectors. The research identifies several reasons why this proposition does not hold true for firms in the current economic environment of India.
- Corporate governance,
- Tangible Assets,
- Intangible Assets
Available at: http://works.bepress.com/madhani/164/