THE RELATIONSHIP BETWEEN CORPORATE GOVERNANCE AND FINANCIAL PERFORMANCE: A RESEARCH ON SOME LISTED FIRMS IN BORSA ISTANBUL BIST-30 STOCK INDEX

Abstract

This study examined the relationship between corporate governance and financial performance of some listed firms in Borsa Istanbul Bist-30 Stock Index between 2012 and 2019. Meanwhile, the specific objectives are to determine the long-run relationship between corporate governance and financial performance and explore the correlation between corporate governance and financial performance. The hypotheses were tested using 5% level of significance. The study employed panel unit root testing, panel cointegration analysis, and panel granger causality test as the estimation techniques. It was found that the panel v-statistic value was -0.885149 and p-value of 0.8120 with its weighted statistic value of -1.229632 and p-value of 0.8906, panel rho-statistic value was 1.864404 and p-value of 0.9689 with the weighted value of 1.73765 and its p-value of 0.9636, the panel PP-statistic value was 0.174469 and p-value 0.5693 with the weighted -1.305849 and p-value 0.0958, the Panel ADF-Statistic value was 0.191093 and p-value of 0.5758 with its weighted value of -1.291603 and its p-value of 0.0982. However, the study concluded that there is no long run relationship between corporate governance and firm performance.