Ntim, Collins G.
An integrated corporate governance framework and financial performance in South African-listed corporations.
South African Journal of Economics, 81, (3), . (doi:10.1111/j.1813-6982.2011.01316.x).
This paper investigates the relationship between an integrated corporate governance (CG) index and financial performance using a sample of 169 South African (SA) listed corporations between 2002 and 2007. We find a statistically significant and positive association between a broad set of good CG practices and financial performance. In a series of sensitivity analyses, we find that our results are robust to endogeneity, different financial performance proxies, alternative CG weighting scheme and firm-level fixed-effects. We further distinctively examine the link between complying with SA context specific stakeholder CG provisions and financial performance. In line with political cost and resource dependence theories, our results reveal a statistically significant and positive nexus between compliance with stakeholder CG provisions and financial performance.
JEL classification: G30, G34, G38
Keywords: corporate governance, corporate financial performance, affirmative action and
stakeholder provisions, King II and South Africa, endogeneity
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