The Impact of corporate governance mechanisms on the market valuation and agency costs of listed nonfinancial firms for the period 2002-2006

Date of Publication

2008

Document Type

Bachelor's Thesis

Degree Name

Bachelor of Science in Management of Financial Institutions

College

Ramon V. Del Rosario College of Business

Department/Unit

Financial Management

Honor/Award

Awarded as best thesis, 2008

Thesis Adviser

Junette A. Perez

Defense Panel Chair

Andrew Adrian Yu Pua

Defense Panel Member

Jedidiah De Gracia
Manrico T. Masagca

Abstract/Summary

This paper examines the relationship among corporate governance mechanisms, market valuation and agency costs using random effects estimation. Using panel data from 2002-2006 for 66 nonfinancial firms listed in the Philippine Stock Exchange, we find that managerial ownership, ownership concentration of blockholders, the presence of a parent company, family or group association, CEO duality and the ratio of independent directors are important governance mechanisms for the Philippines. Above all, our results stress an essential point regarding firms in the Philippines, that reputation and long-term loyalty to corporations are important considerations in internal monitoring. However, we cannot discount that firms have incentives to expropriate as a result of weak external monitoring. If incentives to expropriate are great enough and if the weak legal and institutional monitoring external regulators provide continues, incentives to protests will discontinue. Therefore, our findings put pressure on the need to improve the legal and institutional framework in the Philippines in order to support the interest of minority stockholders.

Abstract Format

html

Language

English

Format

Print

Accession Number

TU14844

Shelf Location

Archives, The Learning Commons, 12F Henry Sy Sr. Hall

Physical Description

1 v. (various foliations) ; 28 cm.

Keywords

Corporate governance--Philippines; Corporations--Finance; Stock exchanges--Philippines

This document is currently not available here.

Share

COinS