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- Title
Corporate Governance Ratings and Firm Performance.
- Authors
Ertugrul, Mine; Hegde, Shantaram
- Abstract
We examine the corporate governance ratings provided by three premier US rating agencies and find that summary scores are generally poor predictors of primary and secondary measures of future firm performance. However, some component sub-ratings that focus on the eight key dimensions of dynamic governance structures provide more positive and reliable evidence of their information content in predicting the multiple dimensions of firm performance. These results reflect the recent observations by academic researchers and money managers that it is extremely difficult to distill all of the complex governance mechanisms into a single integrated, yet informative overall score.
- Subjects
UNITED States; CORPORATE governance; FINANCIAL performance; RATING agencies (Finance); INSTITUTIONAL Shareholder Services Inc.; GOVERNANCEMETRICS International Inc.
- Publication
Financial Management (Wiley-Blackwell), 2009, Vol 38, Issue 1, p139
- ISSN
0046-3892
- Publication type
Article
- DOI
10.1111/j.1755-053X.2009.01031.x