Does Voluntary Corporate Governance Code Adoption Increase Firm Value in Emerging Markets? Evidence from Thailand

34 Pages Posted: 22 Jan 2007

See all articles by Roy Kouwenberg

Roy Kouwenberg

Erasmus University Rotterdam (EUR) - Erasmus School of Economics (ESE); Mahidol University - College of Management; Erasmus University Rotterdam (EUR)

Date Written: November 30, 2006

Abstract

In this paper we investigate the impact of a voluntary corporate governance initiative on firm value in an emerging market context. We consider the corporate governance code introduced by the Stock Exchange of Thailand in 2002, applying to all listed firms on a "comply-or-explain" basis. We find that a one standard deviation increase in a firm-level code adoption index is related to a 10% increase in firm value in the period 2003-2005. Our results show that conclusions of empirical studies on voluntary code adoption in developed markets - typically finding no significant impact on firm value - cannot simply be extrapolated to emerging markets.

Keywords: Corporate Governance, International Finance, Emerging Markets

JEL Classification: G3, F3

Suggested Citation

Kouwenberg, Roy R. P. and Kouwenberg, Roy R. P., Does Voluntary Corporate Governance Code Adoption Increase Firm Value in Emerging Markets? Evidence from Thailand (November 30, 2006). Available at SSRN: https://ssrn.com/abstract=958580 or http://dx.doi.org/10.2139/ssrn.958580

Roy R. P. Kouwenberg (Contact Author)

Erasmus University Rotterdam (EUR) - Erasmus School of Economics (ESE) ( email )

P.O. Box 1738
3000 DR Rotterdam, NL 3062 PA
Netherlands

Mahidol University - College of Management ( email )

69 Vipawadee Rangsit Road
Bangkok, 10400
Thailand

HOME PAGE: http://https://www.cm.mahidol.ac.th/web/index.php/18-faculty/148-roy-kouwenberg-ph-d-cfa

Erasmus University Rotterdam (EUR) ( email )

Burgemeester Oudlaan 50
3000 DR Rotterdam, Zuid-Holland 3062PA
Netherlands