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Elements of Corporate Governance
Elements of Corporate Governance
Corporate Governance:
Corporate Governance may be defined as a set of system pro
cesses and principles which ensure that a company is govern
ed in the best interest of stakeholders.
Elements of Corporate Governance
1. Governmental effectiveness
2. Transparency.
3. Rule of law.
4. Good board practice.
5. Board commitment.
Introduction
Effects of Corporate Governance on share price i
s depend on:
Stability of financial market, increases competitive
ness enhance transparency.
Stakeholders interests
Leads to lower the cost of capital, high demand for
share.
Introduction
Objective of the study:
To examine the impact of corporate governance
To improve policy makers research,
To show the effects of company’s specific variables
To rebuild public trust in companies and financial markets
To achieve better performance
Limitations of the study
Scarcity of availability of data
Primary sources of data are not available
Manipulation of data
time constraints
imperfect market.
Now Presenting
Anisur Rahman
M190203023
Literature Review
Author Name Publishing year of Journal The impact of corporate
Article governance on stock
price
Heracleous, Lizos 2001 Positive
SAKWA, MARTIN BARASA 2006 Positive
Bauer, Rob; Frijins, Bart; 2008 Positive
ROger Otten, Alireza
Tourani-Rad
Samontary, Durga Prasad 2010 Positive
Malik, Saif Ullah 2012 Positive
Andreou; Antoniou; 2012 Positive
Horton; Louca
Ronoh, Evans Kipngeo 2014 Positive
Ronoh, Evans Kipngeo 2014 Positive
Literature Review (continue
d) Author Name Publishing year of Journal The impact of corporate
Article governance on stock
price
Gupta, Pooja; Sharma, 2014 Positive(Limited)
Aarti Mehta
Saeed; Mubarak; 2016 Positive
Hamdan, Mousa
Mohamed, M. Elewa 2016 Positive
Yameen, Mohammad; 2019 Some variables have
Farhan, Najib H.; Tabash, positive impact and some
Mosab I. have negative impact.
Hunjra, Ahmed Imran; 2020 Some variables have
Mehmood, Rashid; positive impact and some
Tayachi, Tahar have negative impact.
Karamoy, Herman; Tulung, 2020 Negative
Joy E.
Research Methodology
*Research methodology is a technique to show overall
procedures.
*It helps a research to know how to come across the result.
*In this study we have used five steps in research methodology.
Research approach:
* Quantative method has been used.
*Linear Regression model has been used to analyze data.
*Descriptive statistics is used to present data analysis.
* To find impact six variables has been used.
* Statistical software E-views and MS Excel is used.
Research Methodology
Sampling Technique:
* This study used 5 listed non bank FI among 23.
* we used simple random sampling method to select
population.
* The five FI are:
1.ICB ltd.
2. IPDC Finance ltd.
3.First Finance ltd.
4. Uttara Finance and Investment ltd.
5. Bangladesh Industrial Finance Company ltd.
Research methodology
Variables: After analyzing several study paper we take 11
variables. But we found that 6 variables are most significant
for this study.
1. Dependent variables: share price
2. Independent variables: Price to earning ratio (P/E ratio),
Governmental Effectiveness ( GOVEF), Corporate social
responsibility( CSR), Divided per share ( Dividend), Number of
independent Directors( NIDIR).
Data Collection:
*All data is collected from the secondary sources.
* The main source is the annual report for period 2010- 2019.
Research methodology
Econometric model:
* Descriptive statistics has been used to show mean, SD,
skewness and value of data.
* Correlation matrix is presented to show multicollinearity.
* To show the relationship between independent and
dependent variables OLS model has been used using 10 years
time series data.
The basic linear model is:
Y = α + β1X 1+ β2X2 + ………..+ βnXn + ε
t-Statistic
Probability
P/E Ratio GOVEF CSR Dividend NIDIR
Variables Value