Corporate Governance Mechanisms and Value Creation: An Empirical Evidence
Musa Usman Kabir *
School of Tunku Puteri Intan Safinaz School of Accountancy (TISSA), UUM College of Business (COB), Universiti Utara Malaysia, Malaysia.
Norhani Binti Aripin
School of Tunku Puteri Intan Safinaz School of Accountancy (TISSA), UUM College of Business (COB), Universiti Utara Malaysia, Malaysia.
Redhwan Ahmed Ali Al-Dhamari
School of Tunku Puteri Intan Safinaz School of Accountancy (TISSA), UUM College of Business (COB), Universiti Utara Malaysia, Malaysia.
*Author to whom correspondence should be addressed.
Abstract
The study examines the perceived effects of corporate governance mechanisms on the value of manufacturing firms in Nigeria by adopting economic value added as the measure of firm value. Corporate governance mechanisms such as concentrated ownership, managerial ownership, the board size, board independence, and foreign ownership as they influence corporate valuation were empirically investigated. 89 listed manufacturing firms in Nigeria were selected for 5 years (2012-2016) for the analysis. The study utilized different tests such as OLS panel data regression and multiple regression model to establish the relationship with panel corrected standard error (PCSE). The study is guided by resource enrichment theory and agency theory. The finding of the study shows that ownership concentration, the board size, and board independence positively impacted on firm value as measured by economic value added. However, managerial ownership and foreign ownership reported negative and insignificant impacts on the value of Nigerian manufacturing firms.
Keywords: Corporate governance mechanisms, economic value added, firm value