Uncovering heterogeneity in the relationship between competition, corporate governance and firm performance using quantile regression on Indian data

Indrani Chakraborty
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引用次数: 3

Abstract

This paper investigates the relation between product market competition, corporate governance and firm performance in Indian manufacturing industries covering the period 1995–2017. Evidence suggests that firm performance improves as competition increases. Besides, results depict heterogeneity in the conditional determinants of firm performance between competitive and non-competitive industries. We observe that at upper quantiles of Tobin's q, competitive firms have better performance than their non-competitive counterparts. Findings also suggest that exogenous factors, such as managerial efficiency or managerial incentives provided by the promoters in competitive firms, may be some of the unobservable factors increasing the net positive differences in Tobin's q between competitive and non-competitive firms. This has the implication that policy frameworks are different in competitive and non-competitive industries. Moreover, we observe that the enactment of Clause 49 in December 2005, which aimed at improving corporate governance in India, improved firm performance in less competitive industries. The findings therefore imply that competition acts as an external mechanism to discipline management and increases firm performance as a consequence. Thus, competition seems to act as a substitute for direct institutional reforms to improve corporate governance. The results have important policy implications. Since improvement in corporate governance has relatively more pronounced effect in non-competitive industries, policy efforts should be made in that specific direction.

利用印度数据的分位数回归揭示竞争、公司治理和公司绩效之间关系的异质性
本文研究了1995-2017年印度制造业产品市场竞争、公司治理和企业绩效之间的关系。有证据表明,随着竞争的加剧,企业绩效也会提高。此外,结果还描述了竞争性和非竞争性行业之间企业绩效的条件决定因素的异质性。我们观察到,在托宾q的上分位数,有竞争力的公司比他们的非竞争对手有更好的绩效。研究结果还表明,外生因素,如管理效率或竞争企业中促销员提供的管理激励,可能是一些不可观察的因素,增加了竞争企业和非竞争企业之间托宾q的净正差异。这意味着政策框架在竞争性和非竞争性行业中是不同的。此外,我们观察到,2005年12月颁布的旨在改善印度公司治理的第49条,提高了竞争较弱行业的公司绩效。因此,研究结果表明,竞争作为纪律管理的外部机制,从而提高了企业绩效。因此,竞争似乎代替了直接的制度改革来改善公司治理。研究结果具有重要的政策意义。由于改善公司治理在非竞争性行业的效果相对更明显,因此应在这方面作出政策努力。
本文章由计算机程序翻译,如有差异,请以英文原文为准。
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