Investment opportunity set, corporate governance practices and firm performance

Hutchinson, Marion and Gul, Ferdinand A. (2004) Investment opportunity set, corporate governance practices and firm performance. Journal of Corporate Finance, 10 4: 595-614. doi:10.1016/S0929-1199(03)00022-1

Author Hutchinson, Marion
Gul, Ferdinand A.
Title Investment opportunity set, corporate governance practices and firm performance
Journal name Journal of Corporate Finance   Check publisher's open access policy
ISSN 0929-1199
Publication date 2004-09
Year available 2003
Sub-type Article (original research)
DOI 10.1016/S0929-1199(03)00022-1
Volume 10
Issue 4
Start page 595
End page 614
Total pages 20
Place of publication Amsterdam, Netherlands
Publisher Elsevier BV
Language eng
Subject 1502 Banking, Finance and Investment
350100 Accounting, Auditing and Accountability
350000 Commerce, Management, Tourism and Services
Formatted 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.
© 2003 Elsevier B.V. All rights reserved.
Keyword Business, Finance
Agency theory
Corporate governance
Investment opportunity set
Firm performance
Top management compensation
Board composition
Agency problems
Q-Index Code C1
Q-Index Status Provisional Code
Institutional Status Unknown
Additional Notes Available online 18 March 2003.

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Created: Mon, 13 Aug 2007, 14:23:31 EST