Study of Corporate Governance and Disclosure Practices: Old Economy Versus New Economy Firms

Abstract

This research focuses on nature of industry and its impact on corporate governance and disclosure practices of firms. Nature of industry divides firms into two broad categories: old economy and new economy firms. Accordingly, this research studies the corporate governance and disclosure practices of firms listed in Indian stock market representing different sectors. The study has taken five sectors into consideration – Power, Oil & Gas, and Metal, along with Health Care and IT. These sectors are segregated into old economy (high capital intensity) and new economy (low capital intensity) sectors depending on nature of industry. This study aims to establish a relationship, if any, between capital intensity of firms and their corporate governance practices in Indian context. Research concludes that there is no difference between old economy firms and new economy firms with respect to corporate governance and disclosure practices. After thorough empirical research, the paper explains why Indian scenario is different from knowledge economy such as United States.

Keywords: Corporate Governance, Disclosure, Capital Intensity, Intangible Assets, Old Economy, New Economy