The Impact of Corporate Governance Quality on Firm Value: A Case Study on Corporate Governance Index of Borsa Istanbul

Abstract

The main purpose of this study is to investigate the effect of corporate governance quality on the firm value of companies operating in the Borsa Istanbul (BIST) Corporate Governance Index. Analyzes were made with the data of the 51 companies operating in the BIST Corporate Governance Index for the 2015-2019 period. The GMM techniques were used as a method. AMG method was also used to consolidate the results obtained from the GMM method and to create robustness. The results indicated that the corporate governance quality of companies has positive effects on firm value. The most important finding that reflects the purpose of the research is that companies should also increase the quality of corporate governance to maximize the value of the firm. Implications for Central European audience: Depending on the results of the study, it is predicted that companies whose profitability has a positive effect on the value of the firm will encourage their managers to increase their corporate governance quality. By complying more with the criteria in corporate governance principles, companies will both increase their institutionalism and maximize the value of the company, which is one of the main financial goals of the company.

The Role of Company Size and Board of Commissioners on Company Value in Disrupted Economics

“…According to the concept of Corporate Governance, a company can attain maximum firm value when the functions and responsibilities of each actor within the modern business organization can be separated. This separation allows the company to achieve optimal firm value (Biçer & Şit, 2023).…”