Title: The impact of corporate governance on financial performance of Indian hotels: cluster analysis

Authors: Najib H.S. Farhan; Faozi A. Almaqtari; Mosab I. Tabash; Eissa A. Al-Homaidi

Addresses: Department of Finance, Universal Business School, India ' Department of Accounting, Faculty of Business, Economics, and Social Development, University Malaysia Trengganu (UMT), Terengganu, Malaysia ' College of Business, Al Ain University, P.O. Box 64141, Al Ain, UAE ' Department of Commerce, Aligarh Muslim University, India

Abstract: The current research aims to assess the influence of corporate governance practices on the financial performance of the Indian hotel industry. A panel dataset of 39 hotels listed on the Bombay Stock Exchange (BSE) was used, spanning the period of 2013 to 2016. One accounting-based measure and one marketing-based measure were used for measuring firms' profitability in the current study. Results revealed a statistically significant difference in the board of directors' size, audit committee size, audit committee diligence, and foreign ownership among the hotels' groups. Further, it was found that corporate governance practices have a significant influence on small hotels' profitability. However, only foreign ownership significantly affects the profitability of all hotel groups. The current study introduces useful insights on the impact of corporate governance practices on hotel firms' performance in India, which are very beneficial and vital to investors, practitioners, academicians, and policymakers in the tourism sector.

Keywords: corporate governance; firms' performance; hotel industry; Bombay Stock Exchange; BSE; cluster analysis.

DOI: 10.1504/IJMP.2022.119922

International Journal of Management Practice, 2022 Vol.15 No.1, pp.24 - 58

Received: 31 Aug 2020
Accepted: 16 Dec 2020
Published online: 24 Dec 2021 *

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