The Association of Corporate Governance and Economy Performance in Turkish Business

Abstract

The aim of this study is to examine the effects of corporate governance practices on financial performance for listed Turkish companies in BIST star market over the period of 2010 to 2015. This study also investigates whether there is a relationship between corporate governance index (CG Index) and firm performance. In this study, five attributes of corporate governance (board size, board composition, ownership concentration, and managerial ownership and CEO duality) have been used to determine their influence on firm performance. Tobin’s Q, ROA and ROE are selected as firm performance measures. The empirical results show that not all attributes of corporate governance significantly consistent for all three financial performance measures (Tobin’s Q, ROA and ROE) excepting board size and CG Index. Board composition, ownership concentration, managerial ownership and CEO duality have mix and statistically inconsistent relationship with all three financial performance measures.