A research submitted in partial fulfillment of the requirements for the degree of Master of Business Administration

Research Studies Project Report (M.B.A.) - Asian Institute of Technology, 2007

Good corporate governance is a means to better performance; it is implied in most corporate governance literatures. Corporate governance is a set of principles which guide the overall management of the company and as such the use of an overall corporate governance indicator which evaluates the total management practice of the companies has been considered important in finding the relationship between corporate governance and firm performance. This study has attempted to include an overall corporate governance indicator as measured by ranks. Since this is a categorical or constructed dummy variable the study has also considered two other numerical corporate governance variables (ownership concentration and proportion of independent directors in the board). Two performance measures (Tobin's q and ROA) have been chosen separately to find the relationship. Several control variables have also been included to accurately measure the explanatory power. This study has found an overall relationship. However, the major corporate governance indicator which is the rank of the companies has not been found statistically significant. Among the other corporate governance indicators ownership concentration has been found positively associated with performance; this is in line with the popular Thai belief.