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Corporate Governance, Accounting Measures and Market Value

Author(s): Tuanye Yu | Chucan Chen

Journal: Asian Journal of Business Management
ISSN 2041-8744

Volume: 5;
Issue: 4;
Start page: 362;
Date: 2013;
Original page

Keywords: Corporate governance mechanism | equity market value | equity book value | net income | transmission pathway

Aiming at finding out the interaction effects between corporate governance, accounting measures (BVE and NI) and market value, we suggest three pathways of market value transmission pathway: performance pathway, direct pathway and capital maintenance pathway, with Partial Least Square (PLS) regression model we analyze the relationship between corporate governance mechanisms, Book Value of Equity (BVE), Net Income (NI) and Market Value of Equity (MVE) basing on a sample of manufacture companies in China A share market from 2007 to 2011. Result shows that most corporate mechanisms which have significant relationships with BVE and NI are significantly related with MVE simultaneously, validating the transmission pathway hypothesis. As for the corporate mechanisms whose significance directions are different among NI, BVE and MVE, we explain them from the perspective of basic features of the variances themselves, the efficiency of transmission pathway and influence direction.

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