Article: Governance quality and stock returns: evidence from an emerging economy-Bangladesh Journal: International Journal of Business Governance and Ethics (IJBGE) 2026 Vol.20 No.1 pp.28 - 47 Abstract: This study aims to examine the effects of governance quality on stock returns using the context of an emerging and developing economy-Bangladesh. To this end, this study collected data from 118 non-financial companies listed on the Dhaka Stock Exchange over ten years (2010 to 2019). This study applied the traditional (fixed effects and random effects) and dynamic panel models, including the system generalised method of moments (GMMs), to test the hypothesised relationship. The panel models found that governance quality has a significant and positive impact on stock returns. The quantile regression results also found that good governance plays a significant positive role in all companies irrespective of their financial performance. However, the impact of macroeconomic and corporate variables was found heterogeneous based on the firm's profitability, as indicated by quantile regression. The study's findings have important policy implications, specifically in developing a sound capital market by enhancing country-level governance quality. Inderscience Publishers - linking academia, business and industry through research

Title: Governance quality and stock returns: evidence from an emerging economy-Bangladesh

Authors: Md. Habibullah; Mohammad Ashraful Ferdous Chowdhury; Md. Mamunur Rashid

Addresses: Bangladesh Institute of Capital Market, Dhaka, Bangladesh ' Department of Business Administration, Shahjalal University of Science and Technology, Sylhet, Bangladesh; IRC for Finance and Digital Economy, KFUPM Business School, King Fahd University of Petroleum and Minerals, Dhahran, Saudi Arabia ' Institute of Cost and Management Accountants of Bangladesh, ICMA Bhaban, Nilkhet, Dhaka – 1205, Bangladesh

Abstract: This study aims to examine the effects of governance quality on stock returns using the context of an emerging and developing economy-Bangladesh. To this end, this study collected data from 118 non-financial companies listed on the Dhaka Stock Exchange over ten years (2010 to 2019). This study applied the traditional (fixed effects and random effects) and dynamic panel models, including the system generalised method of moments (GMMs), to test the hypothesised relationship. The panel models found that governance quality has a significant and positive impact on stock returns. The quantile regression results also found that good governance plays a significant positive role in all companies irrespective of their financial performance. However, the impact of macroeconomic and corporate variables was found heterogeneous based on the firm's profitability, as indicated by quantile regression. The study's findings have important policy implications, specifically in developing a sound capital market by enhancing country-level governance quality.

Keywords: stock return; governance quality; corporate factors; macroeconomic factors; quantile regression; Bangladesh.

DOI: 10.1504/IJBGE.2026.150420

International Journal of Business Governance and Ethics, 2026 Vol.20 No.1, pp.28 - 47

Received: 24 May 2022
Accepted: 25 Sep 2023
Published online: 13 Dec 2025 *

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Title: Governance quality and stock returns: evidence from an emerging economy-Bangladesh

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