Corporate governance practices and firm performance: a configurational analysis across corporate life cycles

Abstract

Purpose

This study aims to explore corporate governance (CG) practices that can lead to firms’ better performance in different organizational life cycles. The authors propose a configurational approach to explore how a set of CG practices combine in bundles to achieve high performance outcomes for firms across their corporate life cycles.

Design/methodology/approach

Fuzzy-set qualitative comparative analysis was used to analyze a sample of data of 21 countries and 9 industries. Data referred to the period of 9 years extending from the year 2005 to the year 2013.

Findings

This study reveals that there are multiple CG practices that exist through firms that can achieve high firm performance. Moreover, CG practices combine in different ways for firms in their growth, maturity and declining stages.

Research limitations/implications

This study demonstrates the value of using a configurational analytical approach to explore both the firm and country-specific CG practices (together) that engage firms to achieve the desired level of performance across the corporate life cycles.

Practical implications

The current study draws attention to the policymakers’ need to assess the current level of regulatory and competitive development of their countries and form policy accordingly. The approach used in the current research study not only offers the linkages between CG and performance to managers as incentives to comply with regulation but also to view CG-related activity as a strategic move.

Social implications

The approach used in the current research study not only offers the linkages between CG and performance to managers as incentives to comply with regulation but also to view CG-related activity as a strategic move.

Originality/value

This study broadening the focus of CG studies to include a rigorous explanation of the global CG phenomena and to provide effective solutions for the practitioners.

Contribution to Impact

This study demonstrates the value of using a configurational analytical approach to explore both the firm and country-specific CG practices (together) that engage firms to achieve the desired level of performance across the corporate life cycles.

Citation

Amin, H.M., Mohamed, E.K.A. and Hussain, M.M. (2021), "Corporate governance practices and firm performance: a configurational analysis across corporate life cycles", International Journal of Accounting & Information Management, Vol. 29 No. 5, pp. 669-697. https://doi.org/10.1108/IJAIM-11-2020-0186