THE IMPACT OF CORPORATE GOVERNANCE DIMENSIONS ON FINANCIAL STRUCTURE OF THE COMPANIES IN DEVELOPING COUNTRIES

• Main Authors: IONESCU ALIN, TUDOREANU PETRU
• Format: Article
• Language: English
• Published: Academica Brâncuşi 2014-12-01
• Series: Analele Universităţii Constantin Brâncuşi din Târgu Jiu : Seria Economie
• Subjects: corporate governance; financial structure
• Online Access: http://www.utgjiu.ro/revista/ec/pdf/2014-06/03_Ionescu,%20Tudoran.pdf
• ISSN: 1844-7007; 1844-7007

Corporate governance represents a current topic for academic community and practitioners, in the context of globalization and crisis, especially in case of developing countries. The main purpose of this paper is to analyze which dimensions of corporate governance are able to exercise a significant impact on the companies’ financial structure, using a dataset with 77 developing countries from Africa, Asia, Latin America and Central and Eastern Europe. The data are provided from World Bank Enterprise Survey website and the variables are grouped in two directions: corporate governance and financial structure variables. In this regard, using principal components analysis approach, we grouped firstly the variables related to financial structure and then variables related to the main four dimensions of corporate governance, such as ownership structure and management quality, transparency, environment and corruption. The impact of corporate governance dimensions on companies’ financial structure was analyzed in a generalized linear model framework and the main result of this paper consists in the fact that, for analyzed countries, companies’ financial structure is significantly influenced by several dimensions of the governance like transparency, environment or corruption.