DOES BETTER CORPORATE GOVERNANCE RATING LEAD TO HIGHER MARKET VALUE?: AN EMPIRICAL INVESTIGATION OF BIST XKURY LISTED COMPANIES

Abstract

This paper tries to establish a link between effectiveness of corporate governance practices and market performance of forty three firms listed, as of the end of 2014, in Borsa Istanbul Corporate Governance Index (BIST XKURY). Drawn on the data set obtained from the annual reports and financial statements of the firms for the period of 2007-2014. panel data analysis revealed that higher corporate governance ratings result in increased market values. The results of the study indicate that together with corporate governance ratings, return on equity and earning per share have positive relationships with market value, too. There is, however, significant negative relationship between free float rate and market value.