The IUP Journal of Corporate Governance
Corporate Governance, Capital Structure and Financial Performance: An Analysis of Indian Automobile Industry

Article Details
Pub. Date : Apr, 2020
Product Name : The IUP Journal of Corporate Governance
Product Type : Article
Product Code : IJCG20420
Author Name :Neeti Mathur, Payal Khandelwal, Satish Chandra Tiwari, Radha Mohan Chebolu
Availability : YES
Subject/Domain : Management
Download Format : PDF Format
No. of Pages : 12



Corporate governance ensures transparency, accountability, responsibility, and fairness of the firms. If the company demonstrates a high level of corporate governance, then the stakeholders of the company trust it. Corporate governance is essential for corporate growth and success. Raising capital, maintaining investors' interest and positive impact on share price, and creating brand loyalty and brand image take care of all the stakeholders of the business. In this paper, an attempt is made to explore the significance of corporate governance practices and their impact on the financial performance of listed Indian companies. The data is collected for Indian automobile companies listed on NSE top 500 for the period 2014 to 2018. The relationship between corporate governance parameters and financial performance parameters and corporate governance and capital structure is explored. Descriptive statistics, correlation and multiple regression analysis have been used to study the influence of independent variables such as composition of board, independent directors, qualified and independent audit committee, board of directors, remuneration of the directors and CEO duality. The dependent variables are financial performance and capital structure represented by ROE and total debt/total asset.


Corporate governance is increasingly finding acceptance for its relevance, pertinence, and underlying importance in the industry and capital markets. Growing firms have voluntarily put in place a system of good corporate governance. This has been accepted for a long time worldwide. The financial scams and crises in emerging markets have led to renewed discussions on the issue of corporate governance.

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