Article
Does Corporate Governance Predict Future Performance? Evidence from Hong Kong
Financial Management
(2011)
Abstract
This study uses time‐series data to examine the relation between changes in the quality of corporate governance practices and subsequent market valuation among large listed companies in Hong Kong. The results indicate that firms that exhibit improvements in the quality of corporate governance display a subsequent increase in market valuation, whereas firms that exhibit deterioration in the quality of corporate governance practices tend to encounter a decline in market valuation. Additionally, the impact is greater for firms that are included in the MSCI index or with a China affiliation. The results provide evidence in support of the notion that good corporate governance can predict future market valuation.
Disciplines
Publication Date
2011
DOI
10.1111/j.1755-053X.2010.01138.x
Publisher Statement
© 2011 Financial Management Association International and is avaliable online at: https://doi.org/10.1111/j.1755-053X.2010.01138.x
* At the time of publication Piman Limpaphayom was affiliated with Chulalongkorn University
Citation Information
Cheung, Y. , Connelly, J. T., Jiang, P. and Limpaphayom, P. (2011), Does Corporate Governance Predict Future Performance? Evidence from Hong Kong. Financial Management, 40: 159-197.