Relationship between corporate governance and cost of equity capital

• Autorzy: Zandi Gholamreza , Shahzad Imran Ahmed , Bajaber Nadia , Nowodziński Paweł , Shahid Muhammad Sadiq

Identyfikatory

DOI

10.17512/pjms.2022.26.1.24

Warianty tytułu

PL

Związek między nadzorem korporacyjnym a kosztem kapitału własnego

• Języki publikacji: EN

Abstrakty

EN

The strategic planning of firms is highly dependent on capital investment, and corporate governance practices in firms play a critical role in seeking to invest with a risk reduction. Two emerging stock markets, India (NSE) and Pakistan (PSX), are selected to investigate the links of costs of equity capital with corporate governance. Therefore, the study's primary aim is to find out the relationship between corporate governance and cost of equity capital and the ways that can be helpful for firms to reduce risk. Data are collected from 260 firms in the chemical and pharmaceutical industries from 2011 to 2020. Dimensions used to measure the corporate governance index include committees’ existence, size and composition of board, ownership structure, and CEO duality. The pooled OLS (fixed effect) regression model has been applied to estimate the coefficient regarding data collected from companies. Study results presented a comparison of firms with strong and weak corporate governance and concluded a higher cost of equity capital for the firms with weak corporate governance compared to others. Using PEG ratio to estimate the cost of equity model is regarded as most suitable for developed countries and is currently deployed in the current study. The study's major contribution is using cross-country data to conduct a preliminary investigation on the relationship between the costs of equity capital with corporate governance. The study findings are highly significant for developing and strengthening the corporate governance structure in companies and providing protection to shareholders' interests. The current paper has presented managerial implications and suggestions for policymakers and shareholders that, in return, are likely to boost assurance in the market.

PL

Planowanie strategiczne firm jest w dużym stopniu uzależnione od inwestycji kapitałowych, a praktyki nadzoru korporacyjnego w firmach odgrywają kluczową rolę w dążeniu do inwestowania przy ograniczeniu ryzyka. Dwa wschodzące rynki giełdowe, Indie (NSE) i Pakistan (PSX), zostały wybrane do zbadania powiązań kosztów kapitału własnego z ładem korporacyjnym. Dlatego też głównym celem badania jest poznanie związku między nadzorem korporacyjnym a kosztem kapitału własnego oraz sposobów, które mogą być pomocne firmom w ograniczaniu ryzyka. Dane zbierane są od 260 firm z branży chemicznej i farmaceutycznej w latach 2011-2020. Wymiary stosowane do pomiaru wskaźnika nadzoru korporacyjnego obejmują istnienie komitetów, wielkość i skład zarządu, strukturę własności oraz dualism CEO . Do oszacowania współczynnika dotyczącego danych zebranych od firm zastosowano model regresji puli OLS (fixed effect). Wyniki badania pozwoliły na porównanie firm o silnym i słabym nadzorze korporacyjnym i wskazują na wyższy koszt kapitału własnego dla firm o słabym ładzie korporacyjnym w porównaniu z innymi. Wykorzystanie wskaźnika PEG do oszacowania kosztu kapitału własnego jest uważane za najbardziej odpowiednie dla krajów rozwiniętych i jest stosowana w niniejszym badaniu. Głównym wkładem badania jest wykorzystanie danych z różnych krajów do przeprowadzenia wstępnego badania relacji pomiędzy kosztami kapitału własnego a nadzorem korporacyjnym. Wyniki badań mają duże znaczenie dla rozwoju i wzmocnienia struktury ładu korporacyjnego w spółkach oraz zapewnienia ochrony interesów akcjonariuszy. W obecnym artykule przedstawiono implikacje zarządcze i sugestie dla decydentów i akcjonariuszy, które w zamian mogą zwiększyć pewność na rynku.

Słowa kluczowe

EN

cost of equity; corporate governance; emerging markets; market-book ratio; organizational performance

PL

koszt kapitału własnego; nadzór korporacyjny; rynki wschodzące; wskaźnik ceny do wartości księgowej; wyniki organizacji

• Wydawca: Czestochowa University of Technology
• Czasopismo: Polish Journal of Management Studies
• Rocznik: 2022
• Tom: Vol. 26, No. 1
• Strony: 386--407
• Opis fizyczny: Bibliogr. 84 poz., tab.

Twórcy

autor

Zandi Gholamreza

• Universiti Kuala Lumpur Business School, Malaysia

• https://orcid.org/0000-0001-9517-8474

autor

Shahzad Imran Ahmed

• The University of Faisalabad, Pakistan; Skema Business School, Sophia Antipolis, France

• https://orcid.org/0000-0002-4027-2719

autor

Bajaber Nadia

• Economics Department, King Abdulaziz University, Saudi Arabia

• https://orcid.org/0000-0002-8220-6189

autor

Nowodziński Paweł

• Czestochowa University of Technology, Poland

• https://orcid.org/0000-0001-8706-9219

autor

Shahid Muhammad Sadiq

• Bahauddin Zakariya University, Multan Pakistan

• https://orcid.org/0000-0002-2383-6818

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Uwagi

Opracowanie rekordu ze środków MEiN, umowa nr SONP/SP/546092/2022 w ramach programu "Społeczna odpowiedzialność nauki" - moduł: Popularyzacja nauki i promocja sportu (2022-2023).