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Investment opportunity set, corporate governance practices and firm performance

  • Marion Hutchinson
  • , Ferdinand A. Gul

Research output: Journal Publications and ReviewsRGC 21 - Publication in refereed journalpeer-review

Abstract

Prior research on the relationship between corporate controls and firm performance is premised on the notion that, in theory, there is direct association between corporate governance and firm performance. However, extensive research has produced mixed and often weak results. In this paper, we posit, as a primary relationship, a negative association between growth and firm performance and then examine whether corporate governance variables moderate this negative relationship. Our results support this notion and show that the role of corporate governance variables in firm performance should be evaluated in the context of the firm's external environment measured in this study in terms of growth opportunities. © 2003 Elsevier B.V. All rights reserved.
Original languageEnglish
Pages (from-to)595-614
JournalJournal of Corporate Finance
Volume10
Issue number4
DOIs
Publication statusPublished - Sept 2004

Bibliographical note

Publication details (e.g. title, author(s), publication statuses and dates) are captured on an “AS IS” and “AS AVAILABLE” basis at the time of record harvesting from the data source. Suggestions for further amendments or supplementary information can be sent to [email protected].

Research Keywords

  • Agency theory
  • Corporate governance
  • Firm performance
  • Investment opportunity set

Policy Impact

  • Cited in Policy Documents

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