Corporate governance and equity finance: an emerging economy perspective
Corporate governance and equity finance: an emerging economy perspective
Purpose – This paper aims to investigate whether firm-level corporate governance has an influence on the equity financing patterns in an emerging economy such as Bangladesh.
Design/methodology/approach – The regression framework uses a questionnaire survey-based corporate governance index (CGI) comprising five dimensions – ownership structures, shareholder rights, independence and responsibilities of the board and management, financial reporting and disclosures and responsibility towards stakeholders. In addition, a number of semi-structured interviews have been carried out with the relevant stakeholders.
Findings –The results suggest a statistically significant positive relationship between CGI and equity capital and, thus, confirm the prediction of the agency theory.
Research limitations/implications –
This study does not address endogeneity and reverse causality issues with respect to the relationship between CGI and equity finance.
Practical implications –
Firms should improve their legal compliance and voluntary activism in corporate governance matters to ensure increased access to equity finance.
Originality/value –
This study is among the first to examine the relationship between overall corporate governance quality and equity finance of a firm from the perspective of a bank-based emerging economy.
Haque, Faizul
8153d83c-427a-4f73-860d-dd7e9460533d
Haque, Faizul
8153d83c-427a-4f73-860d-dd7e9460533d
Haque, Faizul
(2015)
Corporate governance and equity finance: an emerging economy perspective.
Journal of Financial Economic Policy, 7 (3).
Abstract
Purpose – This paper aims to investigate whether firm-level corporate governance has an influence on the equity financing patterns in an emerging economy such as Bangladesh.
Design/methodology/approach – The regression framework uses a questionnaire survey-based corporate governance index (CGI) comprising five dimensions – ownership structures, shareholder rights, independence and responsibilities of the board and management, financial reporting and disclosures and responsibility towards stakeholders. In addition, a number of semi-structured interviews have been carried out with the relevant stakeholders.
Findings –The results suggest a statistically significant positive relationship between CGI and equity capital and, thus, confirm the prediction of the agency theory.
Research limitations/implications –
This study does not address endogeneity and reverse causality issues with respect to the relationship between CGI and equity finance.
Practical implications –
Firms should improve their legal compliance and voluntary activism in corporate governance matters to ensure increased access to equity finance.
Originality/value –
This study is among the first to examine the relationship between overall corporate governance quality and equity finance of a firm from the perspective of a bank-based emerging economy.
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Corporate governance and equity finance- an emerging economy perspective
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Accepted/In Press date: 12 March 2015
e-pub ahead of print date: 3 August 2015
Identifiers
Local EPrints ID: 446715
URI: http://eprints.soton.ac.uk/id/eprint/446715
ISSN: 1757-6385
PURE UUID: 343c8bc2-c4c3-49cf-93e4-80c1447db32f
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Date deposited: 19 Feb 2021 17:30
Last modified: 17 Mar 2024 04:06
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