Does relative strength in corporate governance improve corporate performance? Empirical evidence using MCDA approach
| Autor: | Yilmaz Guney, Claudio M. Rocco, Elvis Hernandez-Perdomo |
|---|---|
| Rok vydání: | 2019 |
| Předmět: |
Marketing
021103 operations research Index (economics) business.industry Strategy and Management media_common.quotation_subject Corporate governance 0211 other engineering and technologies Accounting 02 engineering and technology Relative strength Management Science and Operations Research Multiple-criteria decision analysis Management Information Systems 0202 electrical engineering electronic engineering information engineering 020201 artificial intelligence & image processing Quality (business) business Empirical evidence Construct (philosophy) Decision analysis media_common |
| Zdroj: | Journal of the Operational Research Society. 71:1593-1618 |
| ISSN: | 1476-9360 0160-5682 |
| Popis: | Academics and practitioners have developed different constructs to quantify corporate governance quality. Despite the limitations of the existing measures, they are still being commonly used. The literature finds that the relationship between performance and corporate governance quality can be positive, non-existing or even negative. To resolve this puzzle, we introduce a multi-criteria decision analysis (MCDA) approach to construct an alternative corporate governance quality synthesising companies’ practices and mechanisms through an exhaustive pair comparison procedures based on outranking relationships analysis. Our approach compares the aggregate quality with a well-known corporate governance index, ASSET4 ESG in Thomson Reuters Datastream, using data for the U.S. firms. Using this MCDA approach based on PROMETHEE methods and econometric analysis, we obtain consistently a negative and strong link between firm performance and corporate governance quality. The findings are of particular interest to both scholars and decision makers including providers of corporate governance indices and rating agencies. |
| Databáze: | OpenAIRE |
| Externí odkaz: |
|