Title: Corporate governance and profitability. Value relevance of compliance to corporate governance best practice in Italian listed SMEs

Authors: M. Tutino; C. Regoliosi

Addresses: Department of Business Studies, Via Silvio d'Amico, 77, 00145, Roma, Italy ' Department of Business Studies, Via Silvio d'Amico, 77, 00145, Roma, Italy

Abstract: The debate on the relation between corporate governance quality, firm value and performance is on the top since last years. Literature research shows segmented evidence on the topic depending on the market observed, the sample considered, the statistical model adopted and specific characteristics considered. So that, the question is still open. The paper analyses the relation between corporate governance characteristics as noted in Italian code for listed firms and profitability focusing on industrial listed small-medium entities (SMEs) in Italy in the fiscal year 2011. Results identify negative association between 'good' corporate governance and profitability, both for ROS and EBITDA/sales ratio.

Keywords: corporate governance; control mechanisms; board characteristics; firm value; firm performance; performance indicators; profitability; value relevance; compliance; best practice; Italy; SMEs; small and medium-sized enterprises.

DOI: 10.1504/IJAUDIT.2013.057727

International Journal of Auditing Technology, 2013 Vol.1 No.3/4, pp.241 - 260

Available online: 22 Nov 2013 *

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