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Investment opportunity set, corporate governance practices and firm performance

Hutchinson, Marion R. & Gul, Ferdinand A. (2004) Investment opportunity set, corporate governance practices and firm performance. Journal of Corporate Finance, 10(4), pp. 595-614.

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Abstract

Prior research on the relationship between corporate controls and firm performance is premised on the notion that, in theory, there is direct association between corporate governance and firm performance. However, extensive research has produced mixed and often weak results. In this paper, we posit, as a primary relationship, a negative association between growth and firm performance and then examine whether corporate governance variables moderate this negative relationship. Our results support this notion and show that the role of corporate governance variables in firm performance should be evaluated in the context of the firm's external environment measured in this study in terms of growth opportunities.

Impact and interest:

48 citations in Scopus
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21 citations in Web of Science®

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ID Code: 13272
Item Type: Journal Article
Additional Information: For more information, please refer to the journal's website (see hypertext link) or contact the author.
Keywords: Agency theory, Corporate governance, Investment opportunity set, Firm performance
DOI: 10.1016/S0929-1199(03)00022-1
ISSN: 0929-1199
Divisions: Current > QUT Faculties and Divisions > QUT Business School
Copyright Owner: Copyright 2004 Elsevier
Deposited On: 09 Apr 2008
Last Modified: 29 Feb 2012 23:42

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