Critical review of literature on corporate governance and the cost of capital:the value creation perspective

Corporate governance encompasses a broad spectrum of mechanisms intended to mitigate agency risk by increasing the monitoring of managements’ actions, limiting managers’ opportunistic behaviour, and improving the quality of firms’ information flows. A torrent of literature explains that corporate go...

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Main Author:	Ab. Rashid, Hafiz Majdi
Format:	Article
Language:	English
Published:	African Journal of Business Management 2010
Subjects:	HB Economic Theory HD72 Economic growth, development, planning
Online Access:	http://irep.iium.edu.my/15486/ http://irep.iium.edu.my/15486/ http://irep.iium.edu.my/15486/1/Critical_review_of_literature_on_corporate_governance.pdf

id	iium-15486
recordtype	eprints
spelling	iium-154862012-02-20T08:40:33Z http://irep.iium.edu.my/15486/ Critical review of literature on corporate governance and the cost of capital:the value creation perspective Ab. Rashid, Hafiz Majdi HB Economic Theory HD72 Economic growth, development, planning Corporate governance encompasses a broad spectrum of mechanisms intended to mitigate agency risk by increasing the monitoring of managements’ actions, limiting managers’ opportunistic behaviour, and improving the quality of firms’ information flows. A torrent of literature explains that corporate governance mechanisms are able to enhance a firm’s value. A firm’s value is commonly measured using either market or accounting performance measures. Alternatively, a value is created when a firm enjoys a reduction in its cost of capital. Theoretically, firms that have robust monitoring devices including strong protection of stakeholders’ rights will be able to limit the extent of managerial power abuse and prudently allocate resources. This type of firm should have lower risk and access to cheaper sources of capital than other firms. This paper aimed to provide a critical review of literature on the effect of corporate governance on the cost of capital emphasising on the value creation perspective of corporate governance. African Journal of Business Management 2010 Article NonPeerReviewed application/pdf en http://irep.iium.edu.my/15486/1/Critical_review_of_literature_on_corporate_governance.pdf Ab. Rashid, Hafiz Majdi (2010) Critical review of literature on corporate governance and the cost of capital:the value creation perspective. African Journal of Business Management, 4 (11). pp. 2198-2204. ISSN 1993-8233 http://www.academicjournals.org/ajbm/abstracts/abstracts/abstracts2010/4Sept/Ramly%20and%20Rashid.htm
repository_type	Digital Repository
institution_category	Local University
institution	International Islamic University Malaysia
building	IIUM Repository
collection	Online Access
language	English
topic	HB Economic Theory HD72 Economic growth, development, planning
spellingShingle	HB Economic Theory HD72 Economic growth, development, planning Ab. Rashid, Hafiz Majdi Critical review of literature on corporate governance and the cost of capital:the value creation perspective
description	Corporate governance encompasses a broad spectrum of mechanisms intended to mitigate agency risk by increasing the monitoring of managements’ actions, limiting managers’ opportunistic behaviour, and improving the quality of firms’ information flows. A torrent of literature explains that corporate governance mechanisms are able to enhance a firm’s value. A firm’s value is commonly measured using either market or accounting performance measures. Alternatively, a value is created when a firm enjoys a reduction in its cost of capital. Theoretically, firms that have robust monitoring devices including strong protection of stakeholders’ rights will be able to limit the extent of managerial power abuse and prudently allocate resources. This type of firm should have lower risk and access to cheaper sources of capital than other firms. This paper aimed to provide a critical review of literature on the effect of corporate governance on the cost of capital emphasising on the value creation perspective of corporate governance.
format	Article
author	Ab. Rashid, Hafiz Majdi
author_facet	Ab. Rashid, Hafiz Majdi
author_sort	Ab. Rashid, Hafiz Majdi
title	Critical review of literature on corporate governance and the cost of capital:the value creation perspective
title_short	Critical review of literature on corporate governance and the cost of capital:the value creation perspective
title_full	Critical review of literature on corporate governance and the cost of capital:the value creation perspective
title_fullStr	Critical review of literature on corporate governance and the cost of capital:the value creation perspective
title_full_unstemmed	Critical review of literature on corporate governance and the cost of capital:the value creation perspective
title_sort	critical review of literature on corporate governance and the cost of capital:the value creation perspective
publisher	African Journal of Business Management
publishDate	2010
url	http://irep.iium.edu.my/15486/ http://irep.iium.edu.my/15486/ http://irep.iium.edu.my/15486/1/Critical_review_of_literature_on_corporate_governance.pdf
first_indexed	2023-09-18T20:24:28Z
last_indexed	2023-09-18T20:24:28Z
_version_	1777408324388519936

Critical review of literature on corporate governance and the cost of capital:the value creation perspective

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