Relationship Between Corporate Governance Data and Market Values: An Application Comparing The XKURY

Abstract

Purpose – In recent years, the impact of globalization and technological advancements has intensified competition, increasing the influence of corporate governance practices on the market values of businesses. Today, new regulations have been created to facilitate corporate governance in order to regulate specific relationships between investors and stakeholders. From this point of view, the purpose of this study is to investigate whether there is a relationship between corporate governance index ratings and market values of firms registered in the corporate governance index. Design/methodology/approach – The effect of corporate governance on the market value of the enterprises in the XKURY index is evaluated by panel data method and the relationship between these practices and the performance dimensions of the enterprises is analysed. In our study, we utilized the corporate governance principles compliance ratings, Financial Statements, and Income Statements of 57 companies that were active in the Borsa Istanbul BIST Corporate Governance Index (BIST XKURY) between the years 2001-2021. Findings – The analyses revealed no significant relationship between the dependent variables used in the value relevance measure and the independent variables of participation age in the corporate governance index and corporate governance index average, while positive and negative relationships were identified among other independent variables. Discussion – To determine the impact of corporate governance on market value, which is a crucial point of the study, corporate governance principles compliance rating variables were analyzed as independent variables. It is hoped that the study will contribute to the literature by examining the multiple aspects of the effects of corporate governance on market data. Based on these results, it is recommended that corporate governance applications are important in determining the market values of firms and studies in this direction should be expanded.