THE IMPACTS OF CORPORATE GOVERNANCE MECHANISMS AND CAPITAL STRUCTURE OF LISTED COMPANIES IN THE STOCK EXCHANGE OF THAILAND
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Published:
Dec 29, 2019
Keywords:
Corporate governance mechanisms, Capital structure, Weighted Average Cost Of Capital (WACC) Corporate governance mechanisms ; Capital structure ; Weighted Average Cost Of Capital (WACC)
Main Article Content
Abstract
The research aimed to examine the impact of corporate governance mechanisms and capital structure in stock exchange of Thailand. The quantitative research methods were used in this research to assess the selected samples of the Thailand Stock Exchange Listed Companies, which are recorded during 2012-2016 with the total of 1,665 data were used to analyze data. Statistics analysis used to enter multiple regression analysis and correlation to test the hypothesis for the mechanisms of corporate governance on capital structure. The mechanisms of corporate governance consist of board size, board independence, board meeting, CEO Duality, Institutional ownership and Ownership concentration. Capital structure consist of weighted average cost of capital (WACC).
The research findings shown that impacts of board size, CEO duality, ownership concentration to enhance the significant negative impact on capital structure. Whereas the Board Independence and Institutional ownership have positive significant impacts on capital structure. Additionally, board meeting resulted in a negative relate to the capital of structure with its statistically insignificant. The empirical findings shed light on the role corporate governance mechanisms plays in capital structure, and thus offer insights to policy makers, investor, shareholders and board of directors interested to appropriate financial management and strategies of firm.
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How to Cite
Thunputtadom, P., & Ariyapim, N. (2019). THE IMPACTS OF CORPORATE GOVERNANCE MECHANISMS AND CAPITAL STRUCTURE OF LISTED COMPANIES IN THE STOCK EXCHANGE OF THAILAND. Journal of Graduate School of Commerce-Burapha Review, 14(2), 95–111. Retrieved from https://so02.tci-thaijo.org/index.php/GSC/article/view/207672
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บทความวิจัย
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References
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Almania, O. (2017). Board of director independence a nd financial leverage in the absence o f taxes . International journal of economics and finance, 9(4),90-94.
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Hasan, A., & Butt, S. A. (2009). Impact of ownership structure and corporate governance on capital structure of Pakistan listed companies. International journal of business and management, 4(2),50-57.
Hayat, M., Yu, Y., Wang, M., & Jebran, K. (2018). Impact of managerial and institutional ownership on capital structure: a comparison between China & USA. European journal of business and management, 10(24), 69-80.
Heng, T. B., Azrbaijani, S., & San, O. T. (2012). Board of directors and capital structure: evidence from leading malaysian companies. Asian social science, 8(3), 123-136.
Hermassi, N., Adjaoud, F., & Aloui, C. (2015). The effect of corporate governance and ownership structure on capital structure : empirical evidence from Canada. Gestion 2000, 3, 95-114.
Hodgson, A., Lhaopadchan, S., & Buakes, S. (2011). How informative is the Thai corporate governance index? A financial approach. International Journal of Accounting & Information Management,, 19 (1),53-79.
Jaradat, M. S. (2015). Corporate governance practices and capital structure: a study with special reference to board size, board gender, outside director and CEO duality. International journal of economics, commerce and management , III(5), 264-273.
Jensen, M. C., & Meckling, W. H. (1976). Theory of the firm: managerial behavior, agency costs and ownership structure. Journal of financial economics, 3(4), 305-360.
Joshua, A. (2007). Corporate governance and financing decisions of Ghanaian listed firms. Corporate governance: The international journal of business in society, 7(1), 83-92.
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khan, I., & Wasim, F. (2016). Impact of corporate governance and ownership structure on capital structure. International journal of management sciences and business research, 5(11), 119-133.
Khanchel, I. (2007). Corporate governance: measurement and determinant analysis. Managerial auditing journal, 22 (8),740-760 .
Kyereboah coleman, A., & Biekpe, N. (2006). Corporate governance and financing choices of firms: A Panel data. South african journal of economics, 74(4), 670-681.
Lam, T. Y., & Lee, S. k. (2008). CEO duality and firm performance: evidence from Hong Kong. Corporate governance international journal of business in society, 8(3),299-316.
Malik, S. U. (2012). Relationship between corporate governance score and stock prices: evidence from KSE- 30 index companies. International journal of business and social science, Vol. 3 No. 4 (Special Issue - February),239-249.
Masnoon, M., & Rauf, M. (2014). Impact of corporate governance on capital structure - A study of KSE listed firms. global management journal for academic & corporate studies, 3(1), 94-110.
Masood, A. (2014). Relationship between Ownership Structure and Capital Structure:A Case of Manufacturing Sector of Pakistan. Journal of Basic and Applied Scientific Research, 4(2),180-188.
Oecd. ( 2015). Principles of corporate governance. paris: oecd
Ongklang, A., Dampitakse, K., & Panmanee, P. (2017). An empirical investigation of corporate governance and cost of capital: The case of thai listed companies on the stock exchange of Thailand. Asean journal of management & innovation, 4 (1), 110 – 122.
Ranti, U. O. (2013,). The effects of board size and ceo duality on firms’ capital structure: a study of selected listed firms in Nigeria. Asian economic and financial review, 3(8),1033-1043.
Reddy, Y. (2009). The ethics of corporate governance: An asian perspective. International journal of law and management, 51(1), 17-26.
Santos, M. S., & Moreira, A. C. (2014). Ownership concentration, contestability, family firms, and capital structure. Journal of management & governance, 18(4), 1063–1107.
Shafana, M. (2015). Board of directors’ characteristics impact on capital structure decisions: evidence from top 50 turnover non- financial companies listed on the colombo stock exchange. International journal of science and research, 5(10),79-86.
sheikh, N. A., & Wang, Z. (2013). The impact of capital structure on performance: An empirical study of non-financial listed firms in Pakistan. International journal of commerce and management, 23(4),354-368.
Shleifer, A., & Vishny, R. (1986). Large shareholders and corporate control. journal of political economy, 94(3), 461-88.
Tarus, D. K., & Ayabei, E. (2016). Board composition and capital structure : evidence from Kenya. Management research review, 39(9), pp.1056-1079.
Thunputtadom, P., Pongsupatt, T., Srijunpetch, S., Sincharoonsak, T., Chuaychoo, M., & Bosakoranut, S. (2018). The impact of corporate governance on operational performance of listed companies in the Stock Exchange of Thailand. Asian administration and management review, 1 (1), 84-93.
Waworuntu, S. R., Tjahjana, K. N., & Rusmanto, T. (2014). The effect of corporate governance on capital structure in public listed companies in indonesia. Proceedings Book of ICETSR, 2014 (pp. 243-258). Malaysia: pak publishing group growing knowledge for future.
World Bank. (2009). Report on the observance of standards and codes (ROSC) – Corporate governance: country assessment. World Bank.
วัฒนา ศักยชีวกิจ และ กอบกูล จันทรโคลิกา. (2559). ปัจจัยที่กำหนดโครงสร้างเงินทุนที่เหมาะสม ของบริษัทจดทะเบียนในตลาดอาเซียน. วารสารวิชาชีพบัญชี, 12 (33),หน้า 50-63.
Abeywardhana, D. (2017). Capital structure theory: an overview. Accounting and finance research, 6(1),
133-138.
Achchuthan, S., Kajananthan, R., & Sivathaasan, N. (2013). Corporate governance practices and capital
structure: A case in srilanka. International journal of business and management, 8 (21),114-125.
Ahmad, H., Akhter, N., Siddiq, T., & Iqbal, Z. (2018). Ownership structure, corporate governance and capital structure of non-financial firms of Pakistan. Information management and business review, 10 (1), 31-46.
Ali, N., Nasir, N. M., & Satti, S. L. (2014). The effect of corporate governance on capital structure decisions – a case of saudi arabian banking sector. Acta universitatis danubius. oeconomica, 10(2), 51-60.
Almania, O. (2017). Board of director independence a nd financial leverage in the absence o f taxes . International journal of economics and finance, 9(4),90-94.
Berle, A., & Means, G. (1932). The modern corporation and private property. New York: NY: Macmillan.
Black, K. (2006). Business statistics for contemporary decision making (4th ed.). USA: John Wiley and Son.
Detthamrong, U., Chancharat, N., & Vithessonthic, C. (2017). Corporate governance, capital structure and firm performance: evidence from Thailand. Research in international business and finance, 42 (December), 689-709.
Hasan, A., & Butt, S. A. (2009). Impact of ownership structure and corporate governance on capital structure of Pakistan listed companies. International journal of business and management, 4(2),50-57.
Hayat, M., Yu, Y., Wang, M., & Jebran, K. (2018). Impact of managerial and institutional ownership on capital structure: a comparison between China & USA. European journal of business and management, 10(24), 69-80.
Heng, T. B., Azrbaijani, S., & San, O. T. (2012). Board of directors and capital structure: evidence from leading malaysian companies. Asian social science, 8(3), 123-136.
Hermassi, N., Adjaoud, F., & Aloui, C. (2015). The effect of corporate governance and ownership structure on capital structure : empirical evidence from Canada. Gestion 2000, 3, 95-114.
Hodgson, A., Lhaopadchan, S., & Buakes, S. (2011). How informative is the Thai corporate governance index? A financial approach. International Journal of Accounting & Information Management,, 19 (1),53-79.
Jaradat, M. S. (2015). Corporate governance practices and capital structure: a study with special reference to board size, board gender, outside director and CEO duality. International journal of economics, commerce and management , III(5), 264-273.
Jensen, M. C., & Meckling, W. H. (1976). Theory of the firm: managerial behavior, agency costs and ownership structure. Journal of financial economics, 3(4), 305-360.
Joshua, A. (2007). Corporate governance and financing decisions of Ghanaian listed firms. Corporate governance: The international journal of business in society, 7(1), 83-92.
Kalyanaraman, L., & Altuwaijri, B. (n.d.). The Linkage between Excess boad independence and capital structure : An Exploration in the context of list companies in Saudi Arabia. Journal of applied finance & Banking, 6(3), 129-144.
khan, I., & Wasim, F. (2016). Impact of corporate governance and ownership structure on capital structure. International journal of management sciences and business research, 5(11), 119-133.
Khanchel, I. (2007). Corporate governance: measurement and determinant analysis. Managerial auditing journal, 22 (8),740-760 .
Kyereboah coleman, A., & Biekpe, N. (2006). Corporate governance and financing choices of firms: A Panel data. South african journal of economics, 74(4), 670-681.
Lam, T. Y., & Lee, S. k. (2008). CEO duality and firm performance: evidence from Hong Kong. Corporate governance international journal of business in society, 8(3),299-316.
Malik, S. U. (2012). Relationship between corporate governance score and stock prices: evidence from KSE- 30 index companies. International journal of business and social science, Vol. 3 No. 4 (Special Issue - February),239-249.
Masnoon, M., & Rauf, M. (2014). Impact of corporate governance on capital structure - A study of KSE listed firms. global management journal for academic & corporate studies, 3(1), 94-110.
Masood, A. (2014). Relationship between Ownership Structure and Capital Structure:A Case of Manufacturing Sector of Pakistan. Journal of Basic and Applied Scientific Research, 4(2),180-188.
Oecd. ( 2015). Principles of corporate governance. paris: oecd
Ongklang, A., Dampitakse, K., & Panmanee, P. (2017). An empirical investigation of corporate governance and cost of capital: The case of thai listed companies on the stock exchange of Thailand. Asean journal of management & innovation, 4 (1), 110 – 122.
Ranti, U. O. (2013,). The effects of board size and ceo duality on firms’ capital structure: a study of selected listed firms in Nigeria. Asian economic and financial review, 3(8),1033-1043.
Reddy, Y. (2009). The ethics of corporate governance: An asian perspective. International journal of law and management, 51(1), 17-26.
Santos, M. S., & Moreira, A. C. (2014). Ownership concentration, contestability, family firms, and capital structure. Journal of management & governance, 18(4), 1063–1107.
Shafana, M. (2015). Board of directors’ characteristics impact on capital structure decisions: evidence from top 50 turnover non- financial companies listed on the colombo stock exchange. International journal of science and research, 5(10),79-86.
sheikh, N. A., & Wang, Z. (2013). The impact of capital structure on performance: An empirical study of non-financial listed firms in Pakistan. International journal of commerce and management, 23(4),354-368.
Shleifer, A., & Vishny, R. (1986). Large shareholders and corporate control. journal of political economy, 94(3), 461-88.
Tarus, D. K., & Ayabei, E. (2016). Board composition and capital structure : evidence from Kenya. Management research review, 39(9), pp.1056-1079.
Thunputtadom, P., Pongsupatt, T., Srijunpetch, S., Sincharoonsak, T., Chuaychoo, M., & Bosakoranut, S. (2018). The impact of corporate governance on operational performance of listed companies in the Stock Exchange of Thailand. Asian administration and management review, 1 (1), 84-93.
Waworuntu, S. R., Tjahjana, K. N., & Rusmanto, T. (2014). The effect of corporate governance on capital structure in public listed companies in indonesia. Proceedings Book of ICETSR, 2014 (pp. 243-258). Malaysia: pak publishing group growing knowledge for future.
World Bank. (2009). Report on the observance of standards and codes (ROSC) – Corporate governance: country assessment. World Bank.