[CORPORATE GOVERNANCE CHARACTERISTICS AND FIRM PERFORMANCE: EVIDENCE FROM UK FTSE 350 (2008-2010)]
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CORPORATE GOVERNANCE CHARACTERISTICS AND FIRM PERFORMANCE: EVIDENCE FROM UK FTSE 350 (2008-2010)
The research findings of the study are presented in this chapter. I used descriptive and inferential statistical techniques in this chapter to analyze the data. Descriptive statistics was mainly used to summarize, organize, and simplify the numerical data of the sampled firms listed in FTSE 350 index. Examples of descriptive statistics used are frequency distribution tables, and measures of central tendencies including mean, median, and mode. Range and standard deviation were used to provide a quantitative measure of the degree to which the data are spread out or clustered together. Inferential statistical techniques including hypothesis testing and Analysis of Variance (ANOVA) were used to make generalizations about the FTSE 350 market index from which the data were selected. The last section of the chapter examined correlation matrix of the independent corporate governance mechanisms and multicollinearity problem, if any, of the variables.
The 20 sampled firms has been selected from FTSE 350 market index, corporate governance and financial data for the study starting from 2007 to 2010 were retrieved from corporations' websites, analysts' databases, FTSE 350 databases, Securities Exchange Commission website and online. The search sources included peer-reviewed journals retrieved from academic research database systems.
This chapter is divided into five main sections. The first section focuses on descriptive analysis of the sampled companies. The second section presents inferential statistical analysis techniques used to examine the relationship between corporate governance mechanisms. The third section presents inferential statistical analysis of the relationship between corporate governance mechanisms and ROE and the fourth section presents inferential statistical analysis of the relationship between corporate governance mechanisms and Z scores. The fifth section presents correlation matrix and multicollinearity of the independent corporate governance variables and the last section is the conclusion of the chapter.
Statistics is a discipline that supports the process of decision making in various areas of knowledge, in addition, provides guidelines for appropriate presentation of information. The table below shows the descriptive statistics for the data set of corporate governance characteristics and firm performance, the average value of SCORE i.e. corporate governance index obtained from the corporate governance disclosure scorecard is 59.78, with the standard deviation of 10.548 shows that the data is good fitted for the model. It can be observed from the table below that on average percentage of beneficial shares held by executive directors and non-executive directors is 10.84 with a 2.790 standard deviation. Now in the developed countries have well-defined framework of relations ...