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Abstract

This paper reviews recent research on corporate governance, with a special focus on Indian markets. It finds that better corporate governance benefit firms through greater access to better performance, and more favourable treatment of all stakeholders. Numerous studies show these channels to operate at the various levels of firms, with causality increasingly often clearly identified. Evidence also shows that various internal corporate mechanisms has greater effect on firm profitability when taken due care, and effect negatively when corporate governance is weak. Importantly, how corporate governance regimes change over time and how this impacts firms are receiving more attention recently. Less evidence is available on the direct links between corporate governance diversification and firm performance in the context of Indian Economy. The paper concludes by identifying issues requiring further study, including the special corporate governance issues of principal-principal problem, board structure, ownership structure, in focussed and diversified firms

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