Does Corporate Governance Matter for Equity Returns?

Authors

  • Andy Fodor Ohio University
  • Dean Diavatopoulos Seattle University

Keywords:

Accounting, Finance, Equity Returns, Stock Returns

Abstract

We reexamine the findings of Gompers, Ishii, and Metrick (2003) and Bebchuk, Cohen, and Ferrell (2009) and find the link between corporate governance (measured by G index and E index) and firm stock returns is weaker than previously suggested. We extend the sample period and find a reversal of the relationship documented in these works over the 1990s and early 2000s. We show the observed superior performance of good governance firms during the 1990s is partially driven by large firms and the Nasdaq bubble. We conclude corporate governance is less important for firm stock returns than suggested by previous literature.

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Published

2019-03-12

How to Cite

Fodor, A., & Diavatopoulos, D. (2019). Does Corporate Governance Matter for Equity Returns?. Journal of Accounting and Finance, 16(5). Retrieved from https://articlegateway.com/index.php/JAF/article/view/1051

Issue

Section

Articles