Does Voluntary Corporate Governance Code Adoption Increase Firm Value in Emerging Markets? Evidence from Thailand
34 Pages Posted: 22 Jan 2007
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: Suggested Citation
Do you have negative results from your research you’d like to share?
Recommended Papers
-
A Survey of Corporate Governance
By Andrei Shleifer and Robert W. Vishny
-
The Separation of Ownership and Control in East Asian Corporations
By Stijn Claessens, Simeon Djankov, ...
-
One Share/One Vote and the Market for Corporate Control
By Sanford J. Grossman and Oliver Hart