Does corporate governance predict future performance? Evidence from Hong Kong

Yan Leung Stephen CHEUNG, J. Thomas CONNELLY, Ping JIANG, Piman LIMPAPHAYOM

Research output: Contribution to journalArticle

30 Citations (Scopus)

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. Copyright © 2011 Financial Management Association International.
Original languageEnglish
Pages (from-to)159-197
JournalFinancial Management
Volume40
Issue number1
DOIs
Publication statusPublished - 2011

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Hong Kong
Corporate governance
Market valuation
Time series data
China
Listed companies
Deterioration

Citation

Cheung Y.-L., Connelly, J. T., Jiang, P., & Limpaphayom, P. (2011). Does corporate governance predict future performance? Evidence from Hong Kong. Financial Management, 40(1), 159-197. doi: 10.1111/j.1755-053X.2010.01138.x