The effects of corporate governance on firm performance in the Association of Southeast Asian Nations (ASEAN): A comparative analysis : A thesis submitted in partial fulfilment of the requirements for the Degree of Doctor of Philosophy at Lincoln University

Abstract

Increasing dependence on corporate governance (CG) raises questions about whether corporate governance positively impacts firm performance and whether other variables can change the relationship between corporate governance and firm performance. We investigate the relationship between corporate governance features, including board effectiveness, block ownership, and national governance, on the firm performance of ASEAN-6 non-financial listed firms. We use the fundamental features of CG, such as board size, board independence, gender diversity, CEO duality, institution ownership, foreign ownership, insider ownership, government effectiveness, the rule of law and regulatory quality to analyse their impact on firm performance as measured by return on equity and Tobin’s Q. We use 265 ASEAN-6 non-financial listed firms (2385 firm-year observations) from 2010-2019 and uses OLS estimation and System-GMM estimator to control for the endogeneity issue. The results show that, except for CEO duality and insider ownership, that have no significant impact on performance, the other governance mechanisms significantly influence the performance of ASEAN-6 non-financial listed firms. Specifically, board independence, board gender diversity, governance effectiveness, the rule of law, and regulatory quality significantly positively influence ASEAN-6 non-financial listed firms. The results show a significant negative relationship between block ownership variables and the performance of ASEAN-6 non-financial listed firms. From a theoretical perspective, we emphasise how CG impacts firm performance and uncover the importance of CG systems in ASEAN-6 non-financial listed firms. From a practical perspective, we not only explain the optimal structure of CG that can enhance performance but also identify the moderating impact on board effectiveness, block ownership, national governance and the performance of ASEAN-6 non-financial listed firms.