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Title: Performance, Corporate Governance and Firm Size
Author: Cao, Yirong
ISNI:       0000 0001 3519 2688
Awarding Body: University of Leeds
Current Institution: University of Leeds
Date of Award: 2008
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Given the interactive relationship between firm size and corporate governance from the literature, this study examines whether firm size will place an impact on the relationshijJ between corporate governance structure and firm performance. From the ownership-performance (accounting-based) structure, the results suggest that firm size does not significantly change the nonlinear correlation ---------betweenthese-twofactors.--However, -large -firms -and -small--firms -do -show------------- difference in some other aspects: for example, the ownership-performance relation is influenced by unobserved firm fixed effects for large firms to a greater extent, while small firms are more affected by industry effects. Furthermore, similar results are found when board diversity is used as the -measure of corporate governance. Again, large firms and small firms show little difference on the relationship between board diversity and firm financial . performance. The two samples report little or negative correlations between the J two variables. It seems that over-diverse opinions may distract board decisions, and reduce board efficiency. A similar profile IS found when I examme the link between. the directors'nomination structure and firm financial performance. Both large firms and small firms show that- -insiders' specific knowledge is beneficial to firm performance, but the influence is not significant. Finally, a market-based measure of firm performance is employed in comparison to the above three parts. Although board diversity cannot enhance firm financial value, investors show greater interest in large firms with di,;,erse boards. , Large firms with the most diverse boards experience the largest variance surrounding news events, while this is not the case for small firms. Furthermore, the amount of fluctuation in small firms is systematically larger than that in large firms. ~--- ----- - Collectively, -this -study does -not.provide -consistent results to support -that.firm -------- _ _size can significantly alter the relationship between corporate governance and firm performance. The findings confirm the non-linear relationship between managerial ownership and firm financial performance even after firm size and endogeneity are controlled. Furthermore, this research reveals that the market shows more interest in large firm size and board diversity, although there is no significant correlation between board diversity and firm financial performance. -This proves that accounting measures and market measures may produce distinctive results. In the equity market, the difference between large firms and small firms is exaggerated because ofthe investors' irrationalities.
Supervisor: Not available Sponsor: Not available
Qualification Name: Thesis (Ph.D.) Qualification Level: Doctoral
EThOS ID:  DOI: Not available