Governance Mechanisms and Performance of Publicly Traded Companies

  1. Felício, J. Augusto 1
  2. Galindo Villardón, María Purificación 2
  1. 1 ISEG – School of Economics and Management, University of Lisbon, Lisbon, Portugal
  2. 2 Statistics Department, University of Salamanca, Salamanca, Spain
Revista:
International Journal of Business and Management

ISSN: 1833-3850,  1833-8119

Año de publicación: 2014

Volumen: 9

Número: 12

Tipo: Artículo

DOI: 10.5539/IJBM.V9N12P1 GOOGLE SCHOLAR lock_openAcceso abierto editor

Otras publicaciones en: International Journal of Business and Management

Resumen

Rooted in agency theory, this study analyzes the relationship between governance mechanisms and the performance of listed firms in countries with different levels of economic development and shareholding concentration. The study uses graphic representations of the HJ-Biplot method to perform holistic analysis. This method is effective for qualitative evaluation of relationships. Based on observations from 146 listed companies, this study compares two different contexts and governance backgrounds. Results show that governance mechanisms affect firm performance differently depending on whether firms are operating in a context characterized by concentration or dispersion of voting rights. Sector and company size also influence corporate governance mechanisms and firm performance. This holistic approach yields important contributions to the literature because, despite the number of studies that exist, there is still insufficient understanding of how specific governance mechanisms affect company valuation and performance. This study demonstrates the importance and influences that sector of activity, company size, and context have in developing proper corporate governance mechanisms.

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