Firm characteristics and corporate governance - NZX evidence

Abstract

The objective of the paper is to examine the impact of corporate governance compliance followed by corporate governance regulations in New Zealand Stock Exchange listed companies. A detailed corporate governance index was prepared to measure the compliance and found that corporate governance regulation does matter in New Zealand. Companies that were listed on the New Zealand stock exchange (NZX) over the period 2000 to 2007 are examined, and the results show that corporate governance regulations, stock exchange listing tenure and ownership concentration have positive impact on corporate governance compliance. However, business operating tenure has negative impact on corporate governance compliance. This study documented that voluntary formed such as, ‘comply or explain’ of corporate governance is significantly important of compliance to the companies. This study provides insights to regulators who are interested to regulating corporate governance indicators.