Corporate Governance and Tobin’s Q as a Measure of Organizational Performance

Singh, Satwinder, Naeem, Tabassum, Darwish, Tamer K and Batsakis, Georgios (2018) Corporate Governance and Tobin’s Q as a Measure of Organizational Performance. British Journal of Management, 29 (1). pp. 171-190. ISSN 1045-3172

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Abstract

This empirical study examines the relationship between corporate governance and organisational performance (OP), measured in Tobin’s Q in the context of an emerging economy for which, as yet, only a handful of studies have been conducted. We employ a System GMM approach controlling for endogeneity, and test it on a newly created dataset comprising 324 stock exchange-listed firms in Pakistan. We find that Board size, number of Board committees and Ownership concentration are positively linked with high TQ ratio, whilst Board independence and CEO duality display a negative relationship. In terms of moderating effects, we find that ownership concentration negatively moderates the relationship between Board independence and OP, as well as that of CEO duality and OP. The relationship between the number of Board committees and OP is positively moderated by ownership concentration. Our findings contribute towards better articulating and applying a more concrete measure of OP—that of TQ ratio—whilst, at the same time, testing the Board composition–performance relationship in the context of an upcoming and increasingly important emerging market. Wider applicability of results and policy implications are discussed. Keywords: Tobin’s Q, Corporate governance, Organisational performance, Board structure, Fixed and random effect generalised least square regressions.

Item Type: Article
Article Type: Article
Additional Information: This is the peer reviewed version of the following article: Singh, Satwinder and Naeem, Tabassum and Darwish, Tamer K and Batsakis, Georgios (2018) Corporate Governance and Tobin’s Q as a Measure of Organizational Performance. British Journal of Management, 29 (1). pp. 171-190., which has been published in final form at http://onlinelibrary.wiley.com/doi/10.1111/1467-8551.12237/full. This article may be used for non-commercial purposes in accordance with Wiley Terms and Conditions for Self-Archiving.
Uncontrolled Keywords: Tobin’s Q, Corporate governance, Organisational performance, Board structure, Fixed and random effect generalised least square regressions
Subjects: H Social Sciences > HD Industries. Land use. Labor > HD28 Management. Industrial Management
H Social Sciences > HF Commerce > HF5001 Business
H Social Sciences > HF Commerce > HF5001 Business > HF5601 Accounting. Bookkeeping
Divisions: Schools and Research Institutes > School of Business and Technology > Business & Enterprise Management
Research Priority Areas: Applied Business & Technology
Depositing User: Tamer Darwish
Date Deposited: 31 Mar 2017 12:28
Last Modified: 01 Dec 2018 22:06
URI: http://eprints.glos.ac.uk/id/eprint/4473

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