The Effect of Corporate Governance on Firm performance

SBF120

J
Performance ¿=α 0 + ∑ β K X K¿ + ε t
K=1

Perf(i,t)= α 0 + α 1 * SSB (i,t) + β 1 * CG( i,t)+ γ * X(i,t) + δ * ME(i,t) + ε (i,t)

ROA(i,t) = β0 + β1* lnta (i,t) + β2 *eqta (i,t) + β3 *nlta (i,t) + β4 *cir (i,t) + β5*
lnboard (i,t) + β6 *board_indep (i,t) + β7 * duality_internal+ β8 *internal (i,t) + β9*
WOM(i,t) β10* inf (i,t) + β11* gdp (i,t) + ε it

ROE(i,t)= β0 + β1* lnta (i,t) + β2 *eqta (i,t) + β3*nlta (i,t) + β4 *cir (i,t) + β5* lnboard
(i,t) + β6*board_indep (i,t) + β7 * duality_internal+ β8 *internal (i,t) + β9* WOM
(i,t) β10* inf (i,t) + β11* gdp (i,t) + + ε it

i : Le nombre des entreprises

t : Le nombre d'années
PERF: Performance d’entreprise
Nous utilisons le modèle suivant pour tester nos hypothè2ses.
Performances i, t = α 0 + β 1 * CG i, t + γ * X i, t + δ * ME t + ε i, t
où Performance i, t est l'indicateur de la variable de performance de l’entreprise i à
l'instant t
CG , il s'agit d'une matrice de variables de gouvernance d'entreprise à l'instant t
WOM Présence de la femme dans le conseil d’administrative
Audit Committee, Corporate Governance and Firm Performance
SBF120

FMit Firm performance for firm ‗i‘ at time ‗t‘ measured using ROA, ROE, Tobin‘s Q and M
Cap as proxies

ROA Return on Assets i.e. the ratio of total income and total assets

ROE Return on Equity

i.e. ratio of net income to shareholder‘s equity

Tobin‘s Q (TOQ) Ratio of market value of firm to total assets

Market value of firm Market value of equity + market value of debt

M Cap Market Capitalization (Stock price * shares outstanding)

ai time invariant intercept for firm i.

BC Board Composition i.e. number of independent directors on the board

BS Board size i.e. total number of directors on the board

LS Leadership structure i.e. whether the position of Chairman of the board and CEO is
occupied by same person. ‗0‘is given when there is no duality and ‗1‘ otherwise.

PS Promoter shareholding i.e. % shares owned by promoters

ACIND % independent directors in the audit committee

ACM number of meeting of audit committee in a year

LEV ratio of debt to equity

FAGE firm age from the year of incorporation u residual or disturbance term
ROA(i,t) = β0 + β1* MV (i,t) + β2 *MC (i,t) + β3 *BC (i,t) + β4 *BS (i,t) + β5* LS (i,t)
+ β6 *PS (i,t) + β7 * ACIND+ β8 *ACM (i,t) + β9* WOM(i,t)+ β10*LEV(i,t) +
β11*FAGE(i,t) + β12* inf (i,t) + β13* gdp (i,t) + ε it

ROE(i,t) = β0 + β1* MV (i,t) + β2 *MC (i,t) + β3 *BC (i,t) + β4 *BS (i,t) + β5* LS (i,t)
+ β6 *PS (i,t) + β7 * ACIND+ β8 *ACM (i,t) + β9* WOM(i,t)+ β10*LEV(i,t) +
β11*FAGE(i,t) + β12* inf (i,t) + β13* gdp (i,t) + ε it

Q_TOB(i,t) = β0 + β1* MV (i,t) + β2 *MC (i,t) + β3 *BC (i,t) + β4 *BS (i,t) + β5* LS
(i,t) + β6 *PS (i,t) + β7 * ACIND+ β8 *ACM (i,t) + β9* WOM(i,t)+ β10*LEV(i,t) +
β11*FAGE(i,t) + β12* inf (i,t) + β13* gdp (i,t) + ε it
 The impact of governance policy on corporate social
responsibility SBF 120

J
RSE ¿ =α 0+ ∑ β K X ¿K +ε t
K =1

RSE(i,t)= α 0 + β 1 * CG( i,t)+ γ * X(i,t) + δ * ME(i,t) + ε (i,t)

RSE(i,t) = β0 + β1* lnta (i,t) + β2 *eqta (i,t) + β3*nlta β4 *cir (i,t) + β5* lnboard (i,t) +
β6*big4 (i,t) + β7 *board_indep (i,t) + β8 * duality_internal+ β9 *internal (i,t) + β10*

WOM (i,t) β11* inf (i,t) + β12* gdp (i,t) + ε it

THE IMPACT OF CORPORATE GOVERNANCE AND ITS
CONSEQUENCES ON CSR DISCLOSURE

FV (TQ) n = α + β 1CSRD + β 2 SIZE + β 3 Comp n + β 4 CEO Dual + β 5

Size + β 6 Profit + β 7 Leverage + β 8 GDP + β 9 INF + ɛ

Where:
FV (TQ) = is the firm value measured using Tobin's Q (TQ). Tobin's Q ratio can be defined
as: Tobin's Q = (TMV + DEBT) / TA. TMV is the total market value of the firm,
comprising the market value of the common and the preferred stocks. DEBT is the
book value of the firm's debt
β1 = Independent variables (CSR disclosure score of the sample firms)
β2 - β8 = Control variables (B. Size (board size), B. Comp (board composition), CEO
Dual (CEO duality), F. Size (refers to firms size), Profit
, F. Leverage (refer to firms leverage), and C. GDP
e = the error term

FV (MTBV) n = α + β 1CSRD + β 2 .SIZE n + β 3 B.Comp n + β 4 CEO Dual n + β 5

F.Size n + β 6 F. Profit n + β 7 F. Leverage n + β 8 C.GDP + β 9 INF + ɛ

FV (MTBV) = firm value measured using MTBV

β1 = Independent variables (CSR disclosure score of the sample Firms)
β2 - β8 = Control variables (B. Size (board size), B. Comp (board composition), CEO
Dual (CEO duality), Size Profit and GDP
(growth domestic product of the sample countries).
e = the error term