Available online at www.sciencedirect.

com

ScienceDirect
Procedia - Social and Behavioral Sciences 150 (2014) 1061 1070

10th International Strategic Management Conference

The determinants and effects of corporate governance level:

evidence from Istanbul stock exchange
Selim Arena , Sleyman zkan Kayagilb , Sibel Din Aydemirc, c
a,c

Gebze Institute of Technology, Kocaeli, 41400, Turkey

b

Private Firm University, Istanbul, Turkey

Abstract
This paper aims to investigate the determinants and effects of corporate governance level of the the firms operating in
Istanbul Stock Exchange. It was drawn that firm value was the most important determinant for corporate governance
level to be enhanced. Moreover, it was found that firm value mediated corporate investor ratio on corporate
governance level. On the other hand, there found a positive relationship between growing corporate governance
implementations of the firms and the firm performance. The manifestation of the agency costs resulting from earnings
management practices in direction decreasing earnings was seen as a variable that moderates this relationship. Lastly,
it was concluded that rising corporate governance implementations had impact on foreign investor preference and that
these investors chosen those firms whose corporate governance implementations were enhanced.
2014 Published by Elsevier Ltd. This is an open access article under the CC BY-NC-ND license
2014 Published by Elsevier Ltd. Selection and/or peer-review under responsibility of the 10th
(http://creativecommons.org/licenses/by-nc-nd/3.0/).
International
Strategic
Management
Conference
Peer-review
under
responsibility
of the International
Strategic Management Conference.
Keywords: Corporate Governance, Earnings Management, Firm Value, Corporate Investors

1. Introduction
World economy has been rapidly changed and developed since industrial revolution. Besides, the
number of the parties increases every day and this leads to a substantially competitive environment. Firms
willing to outperform in such an environment have intensely strived to specialize operationally and
administratively, aiming to use production factors efficiently. This process brings about the
professionalisation causing the ownership and the control to be polarized in the firms. The association

Corresponding author. Tel. + 90-262-605-1431
Email address: saydemir @gyte.edu.tr

fax. +90-262-654-3224

1877-0428 2014 Published by Elsevier Ltd. This is an open access article under the CC BY-NC-ND license
(http://creativecommons.org/licenses/by-nc-nd/3.0/).
Peer-review under responsibility of the International Strategic Management Conference.
doi:10.1016/j.sbspro.2014.09.118

1062

Selim Aren et al. / Procedia - Social and Behavioral Sciences 150 (2014) 1061 1070

between these two polarized groups seems to be directed by the mutual interest at first, whereas it turned
into a conflict, owing to fact that the executives having expertise and the power of control chase their own
interests. Similarly, there also exists a conflict between the majority and the minority shareholders,
resulting from capital shares allocated imbalancedly for various reasons in aggregate corporations. The
majority shareholders generategreater excess earnings because of the special knowledge.
These conflicts are called as agency problems in the literature. Agency costs largely damage firmss
survival, having impact on their financial structure.Bringing about the untrustable environment, this
hinders market development. Various institutions have imposed some regulations to solve agency
problems and hence to create a trustable environment by enhancing firmss continuity. There also have
been many studies which resonate with this crucial issue, proposing some precious solutions to the
agency problems. The concept of corporate governance (henceforth CG) has been originated from these
valuable efforts.Yet, those efforts bringing about CG do not incorporate coercive rules. Thus, firms
displaydivergency regarding CG practices.In this context, a sample of the firms trading in Istanbul Stock
Exchange (henceforth ISE) was employed to investigate the determinants of CG level and its influences
on the firm performance.
2. Literature Review
They are not usually same who place funds and those who manage in the corporations. This distinction
can be the most essential point that reveals the need of CG (Stuart, 2006).It is not always possible for both
capital owners and those having control power to strive for common interests simultaneously.The selfinterests of principal partners and senior executives may sometimes dominate the others. While senior
executives serving their self-interests can manipulate earnings, shareholders and executives who have
control can transfer the funds to other companies they own by means of transfer pricing or asset stripping
(La Porta et al., 2000).
In that context, Aren (2009) in his empirical study on ISE provided evidence that several accounting
practices known as earnings management (henceforth EM) have been appealed, succeeding the
management change seen in the companies.Leuz et al. (2003) in their study, encompassing 31
countries,proposed that EM practices are less likely to be seen in the countries in which have developed
stock markets, strong investor protection and more dispersed ownership.In their study conducted in 49
countries, La Porta et al. (1998) mentioned about the relationship between the legal investor protection
and the law system in a country. Accordingly, there exists a strong investor protection in countries having
common-law system such as UK and USA, and a weak investor protection in those having civil law
system. Additionally, they added the ownership concentration(henceforth OC)is considerably high
especially in countries that gave no investor protection.
Shleifer and Vishny (1997) manifested that OC was significantly effective in solving the problems
suggested by agency theory.It is also pointed out that however highly OC minimized agency problems,
principal partners who having control violated rights of minority shareholders by giving priority to their
self-interests.La Porta et al. (1999) examined the ownership structure and the shareholders having control
in large companies and stated thatfirms except those which had strong shareholder protection were mostly
family or publicly owned.Also, it was seen that firms were not common whose equities were controlled
by financial intermediaries. The studies conducted in Turkey, as another country which gave weaker
investor protection (La Porta et al., 1998), also supported these findings. Demirag and Serter (2003)
expressed that the OC was very high in Turkey and that firms were controlled by families. The same
study drawned conclusion that pyramidal structure of ownership and big business group gave more

Selim Aren et al. / Procedia - Social and Behavioral Sciences 150 (2014) 1061 1070

control to the firm shareholders than the cash flows did.Shinong et al. (2009) stated no relationship
between ownership and legal investor protection in terms of firms controlled by the state and that the state
has protected other investors rights by conducting monitoring activities on firms through its force.
This is especially the case in companies in Europe and Asia which shareholders had more control
because of pyramidal structure of ownership (Levy, 2007). Faccio and Lang (2002) drawn conclusion that
controlling shareholders increased their control power in several ways.Dyck and Zingales (2004) and
Leuz et al. (2003) provided evidence that having control power on a firm has provided some private
benefits for shareholders.
Delgado-Garcia et al. (2010) stated that the presence of majority shareholders in firms inferred as a
power of control and that this was perceived negatively by other shareholders in case of malicious
handling. Moreover, some studies(Ruiz-Mallorqu &Santana-Martin, 2011) claimed a negative (positive)
relationship between banking institutions (investment funds) as a dominant shareholder and firm value
(henceforth FV). The reason for these effects was suggested that firm managers who made an agreement
with bank managers might use firms funds for their private goals and that investmend funds took
measures for activities which decrease the firm performance.Mizuno (2010) expressed that CG practices
would be improved qualitatively when corporate investors (henceforth CI) are present.
Who owns control in a firm is very crucial issue for creditors. It can shift borrowing costs, based on
firm risk. Hence, it can influence on firm performance. Anderson et al. (2003) found that,in firms having
founding family ownership structure, borrowingreduced agency costs. Similarly, they added that the
presence of independent board of directors had same effect on these costs.
Kim et al. (2007)found a negative (positive) association between minority shareholder rights in a
country and ownership structure (board independence in a firm). Also, they concluded that stronger legal
protection of investor in a country was related to more independent board members in firms. Mangena
and Tauringana (2007), in their research on Zimbabwe Stock Exchange, the second big stock market in
Africa, they found that the ratio of CI ownership, the percentage of non-executive directors and the
number of independent auditing members were positively related to shares owned by foreigners. Bae and
Goyal (2010) stated that foreign shareholders are considerably high in firms whose CG is stronger. Linck
et al. (2008) stressed that FV, debt ratios, financial performance and being operated in different fields are
associated with the size of independent board and with the number of independent members. Further,
Aren et al. (2012) displayed a negative relation between dept ratios and firm profitability in both Taiwan
and also Turkey.
3. Methodology
In this study, it is aimed at investigating the effects of CI level, external financing needs and FV, all of
which enhance CG level excluding legal regulations. On the other hand, it is intended to examine possible
relations depending on whether the improvements in CG level have impact on firms financial
performance and being preferred by foreign investors.
The study sampleincluded 162 firms traded continously on ISE on all indexes, excluding sportive and
financial indexes. This research based on the secondary data relating firms. Relevant data such asFV,
external financing needs, firm performance and EM were accessed through Finnet Analiz (Excel Add-In)
Database while information about corporate and foreign investors were obtained from yearly statistical
reports on MKK (MKK is the central securities depository for capital market instruments which are
decided by Capital Markets Board of Turkey to be dematerialized). Lastly, CGdata were acquired by
compliance reports on firm websites.

1063

1064

Selim Aren et al. / Procedia - Social and Behavioral Sciences 150 (2014) 1061 1070

3.1. Research Model and Hypotheses

CIs aiming at securing their investment returns demand firms for improving CG level such as
independent auditing boards (Mizuno, 2010). Additionally, CIs make an effort to increase their auditing
activities on firms in order to attain more investment return (Brav et al., 2008; Del Guercio and Hawkins,
1999, cited in Hadani et al.,2011; Mande et al., 2012). Thus, the hypothesis derived from here;
H1: The presence of CIs in the firm increases firms level of CG.
Chen et al. (2010) found a negative relation between external financing needs and FV. Ruiz-Mallorqu
and Sanatana-Martin (2011) determined a positive relation between FV and the presence of banks as
controlling shareholders or the second/third big partner. Similarly, Baek et al. (2004) indicated a positive
association between CIs and FV. Accordingly, following hypothesis derived;
H2: There is a positive relationship between no external financing needs and existence of CIsand firm
size.
Mande et al. (2012) pointed out that small firms had lower CGlevels owing to inadequate monitoring
by the public. Aksu and Kosedag (2006) reported that large firms would improve their CGsince they were
monitored especially by financial intermediaries. Linck et al. (2008) and Coles et al. (2008) stressed that
firms with higher FVare more likely to enlarge their boards and to increase independent members in those
boards. Thus, the hypothesis starting from this,
H3: There is a positive relationship between firm size and CG level.
Mizuno (2010) and Mande et al. (2012) indicated a positive relation between CI ratio and CG level.
Linck et al. (2008) and Guest (2008) referred a positive relation between FV and CG. Ruiz-Mallorqu and
Santana-Martin (2011) mentioned about a positive association between CI ratio and FV, known as the
determinants of CG level. Additionally, Guest (2008) pointed that FV is a crucial determinant of CG
level. Both these triple relations existed among them and FV being an important determinant of CG level
raised doubts whether FV mediates CI ratio on CG level. Accordingly, the following hypothesis;
H4: FV mediates CI ratio on CG level.
Theoretically, the relationship between CG and financial performance depend upon agency problems
among shareholders originating from information asymmetry (Jensen and Mecling, 1976). La Porta et al.
(1999) reached findings that controlling shareholders with a motive to preserve their earnings can exploit
firms resources, leading to a decrease in firm value. Beside, Gompers et al. (2003) expressed that CG
level in firms related to stock return. Klapper and Love (2004) determined a relationship between CG
level and firms both Tobins Q and ROA. Kula (2005) reported a relation between the separation of CEO
and executers and firm performance. Starting from here, the hypothesis;
H5a: When CG level increases, firm profitability (EBIT/Total Assets) increases too.
H5b: When CG level increases, firms Tobins Q ratio increases too.
Lack of transparency in firms may leads to problems based on information asymmetry. These
problems cause an increase of risk premium in calculation of return on investment. Hence, foreign
investors would make their investment preferences on those firms with lower information
asymmetry(Jiang ve Kim, 2004). Beside, Mangena and Tauringana (2007) and Barniv and Bao (2009)
expressed that foreign investors took firms CG mechanisms into consideration while choosing their
investments. Accordingly, the subsequent hypothesis;
H6: When CG level increases in the firm, foreign investors in a country make more preferences on that
firm.
Klapper and Love (2004) and Gompers et al. (2003) stated that CG practices improved firm
performance thereby reducing firms agency costs. Hazarika et al. (2012) and Hadani et al. (2011) pointed

Selim Aren et al. / Procedia - Social and Behavioral Sciences 150 (2014) 1061 1070

1065

out that EM practices in firms increased agency costs. Hence, agency costs were apparent in firms
practicing EM and improving CG practices in these firms whose agency costs are apparent were more
effective in enhancing firm performance than those having inapparent agency costs. Accordingly, the next
hypotheses;
H7a: EM activities in decreasing earnings way moderates CG on firm performance (EBIT/Tot.Ass.)
H7b: EM activities in decreasing earnings way moderates CG on firm performance (Tobins Q).
The research model encompassing the hypotheses is depicted below.
EM Activities Smaller Than Zero (09)
H7a

H1

Corporate Investor(09)

H7b
H5a

H2
H2

Firm Size (09)

External Financing Needs (09)

EBIT/Tot.Ass. (10)
Tobins Q (10)

CG Level (10)

H3
Fig 1. Research Model

Table 1: Variables in the Research Model

Variable
CALCULATION

H5b

H6

Foreign Investor Ratio in Total (10)

REFERENCES

CITED BY
Aksu and Kseda,
(2006), Yu, 2008,
Lasfer, 2006).
Demirgc-Kunt and
Maksimovic (1998)
and Modified approach
of Durnev and Kim
(2005) cited in Chen
et al.( 2010).

Market Value

Natural logarithm of firm value at the end of year

2009 was used.

Finnet Analysis (Excel

Add-In) Database

Ext. Financing
Needs

1, The presence of external financing needs if the

discrepancy between Total Assets Growth
Percentage and ROE/(1-ROE) ratios greater than
zero, otherwise 0

Finnet Analysis (Excel

Add-In) Database

Corp. Investor
Ratio

Corporate Investor Stocks / Total Stocks

MKK and Finnet Analysis

(Excel Add-In) Database

Mizuno, (2010)

Firms websites

Mitton, (2002) Forbes

and Milliken, (1999),
Goodstein et al.,
(1994), Mak and
Roush, (2000),
Filatotchev and
Nakajima, (2010),
Bhagat and Black,
(1999), Klein, (2002)
Jensen, (1993)

CG Level

1. 1, if the number of board members of related firm

greater than the sample, otherwise 0
2. 1, if the number of non-executer members gerater
than executer members in related firm 1, otherwise
0,
3. 1, if independent members having qualifications
specified by Capital Market Board exist in related firm,
otherwise, 0
4. 1, related firm establish a corporate governance
committee in their independence board, otherwise, 0
5. 1, the same person does not hold director of both
independent board and also ecexutive board, otherwise
0
6. 1, related firm gets the independence auditing
service from Price Waterhouse Coopers, Deloitte
Touche Tohmatsu, Ernst & Young and KPMG, known
as the big four, otherwise, 0
Max.6 Points

EM

Modified Jones Model

Firm Performance

ROA and Tobins Q

Foreign Investor
Preference

Foreign investor shares / total foreign investor shares

in the stock market

Finnet Analysis (Excel

Add-In) Database
Finnet Analysis (Excel
Add-In) Database
MKK

Aren (2003)
Klapper and Love,
2004
Mangena and
Tauringana, 2007

1066

Selim Aren et al. / Procedia - Social and Behavioral Sciences 150 (2014) 1061 1070

3.2. Analysis
In this section, the research hypotheses will be tested successively in an effort to search their precision
and the findings relating to validation of the model will be discussed.
H1: The presence of CIs in the firm increases firms level of CG.

To test this hypothesis, simple regression model is given below in equation (1).
(1)
In the regression model above, the subscripts t-1 and t represent years 2009 and 2010 respectively.
Table 2. Regression Analysis Results of Corporate Investor Ratio on CG Level
REGRESSION ANALYSIS
VARIABLES

Dependent Variable
CG Level
Independent Variables

Corporate Investor Ratio

0,798

0,000

R2

0,634

0,000

The regression results show a statistically significant relation between CI ratio and CG level. Beside,
the model is significant overall and CI ratio is explaining nearly 64 % of the total variation in CG level.
An increase of one point in CI ratio causes an increase of 0,798 in CG.Thus, H1 is supported.
H2: There is a positive relationship between no external financing needs and existence of CI and firm size.
The simple regression model to test related hypothesis can be seen in equation (2) below.
(2)
Table 3. Regression Analysis Results of Corporate Investor Ratio, External Financing Needs on Firm Value
REGRESSION ANALYSIS
VARIABLES

P
R2
Dependent Variable
Firm Value
Corporate Investor Ratio
0,632
0,000
0,430
Independent Variables
External Financing Needs

-0,130

P
0,000

0,032

Being significant at the 0.000 observed level, 43% of total variation in FV is explained by CI ratio and
external financing needs. Individually, if CI ratio (external financing need) increases (decreases) by 1
unit, then FV increases by 0,63 (0.13) unit. CI ratio (external financing need) is significant at 0.000 (0.05)
observed levels. As a result, the hypothesis H2 is supported.
H3: There is a positive relationship between firm size and CG level.
The simple regression model specified to test the related hypothesis is given in equation (3).
(3)
Table 4. Regression Analysis Results of Firm Value on CG Level
REGRESSION ANALYSIS
VARIABLES
Dependent Variable
CG Level
Independent Variables

Firm Value

0,911

0,000

R2

0,828

0,000

As seen on Table 4, nearly 83 % of total variation in CG level is explained by FV. 1 % change in FV

causes a change of 0.911 in CG level. It can be seen that FV is a crucial determinant of CG level.
H4: FV mediates CI ratio on CG level.
As known, for the presence of any mediating variable, it is necessary that there must be relations
denoted by I, II ve III in figure 2 and that the relation denoted by III must be decreasing or completely
disappearant after the inclusion of the mediating variable (Demircan, 2003 cited in Alpkan et al., 2005).
Mediating Variable

I
Independent Variable

III

II
Dependent Variable

Fig 2. Mediating Effect

1067

Selim Aren et al. / Procedia - Social and Behavioral Sciences 150 (2014) 1061 1070

Table 5. Results of Correlation Analysis Between Corporate Investor Ratio, Firm Value and Corporate Governance Level
CORRELATION ANALYSIS
Corporate Investor
Firm Value
Corporate Governance Level
Corporate Investor Ratio
1
0,648**
0,375**
Firm Value
0,648**
1
0,516**
Corporate Governance Level
0,375**
0,516**
1
** Correlation is significant at the 0.01 level.

On Table 5, it seems that, CI ratio, FV and CG level are significantly correlated at 99 %

level.Following this analysis, the regression results produced from equation (4) are reported below.
(4)
Table 6. Regression Analysis Results of Corporate Investor, Firm Value on CG Level
REGRESSION ANALYSIS
VARIABLES

Dependent Variable
CG Level
ndependent Variables
Corporate Investor Ratio
0,07
Firm Value

0,47

R2

0,433

0,259

0,000

0,000

Although CI ratio was significant at the model in context of the hypothesis H1, it is not significant at
nearly 0,5 observed level because FV mediates this relation. Summarizing the analyses in order to
determine CG level, however FV is a substantial determinant of CG level and so is CI ratio individually,
FV mediates CI ratio on CG level. Yet, CI ratio and external financing needs have effect on CG level
through FV.
H5a: When CG level increases, firm profitability (EBIT/Total Assets) increases too.
H5b: When CG level increases, firms Tobins Q ratio increases too.
To test the hypotheses H5a and H5b, simple regression models below are specified.
(5)
(6)
Table 7. Regression Analysis Results of Corporate Governance Level on EBIT/Tot. Ass.
REGRESSION ANALYSIS
VARIABLES

Dependent Variable
EBIT/ Tot.Ass.
Independent Variables
Corporate Governance Level
0,623

P
0,000

R2

0,384

0,000

Table 7 shows the results of testing the hypothesis H5a. 38,4% of total variation in EBIT/Tot. Ass. is
explained by CG level, with 0,000 observed or exact level of significance. Hence, H5a is supported.
Table 8. Regression Analysis Results of CG Level on Tobins Q
REGRESSION ANALYSIS
VARIABLES
Dependent Variable
Tobins Q
Independent Variables
CG Level

0,529

P
0,000

R2

0,275

0,000

Similarly, CG level explains 28% of total variation in Tobins Q with 0,000 observed level of
significance. Hence, the hypothesis H5b is supported.
H6: When CG level increases in the firm, foreign investors in a country make more preferences on that
firm.
Table 9. Regression Analysis Results of CG Level on Total Foreign Investor Share
REGRESSION ANALYSIS
VARIABLES

Dependent Variable
Total Foreign Investor Share
Independent Variables
CG Level
0,355

P
0,000

R2

0,121

0,000

1068

Selim Aren et al. / Procedia - Social and Behavioral Sciences 150 (2014) 1061 1070

As seen above, the effect of CG level in a firm on preferences of foreign investors in a country is
significant at 0,000 observed level of significance. Moreover, CG level explains 12,1% of total variation
in total foreign investor ratio.
H7a: EM activities in decreasing earnings way moderates CG on firm performance (EBIT/Tot.Ass.)
H7b: EM activities in decreasing earnings way moderates CG on firm performance (Tobins Q).
To determine firms EM activities, Modified Jones Model is employed. In the light of this model,
discreationary accruals of each firm were calculated, searching for EM activitiesdirection. It is expected
that the activities in the direction of reducing earnings (negative discreationary accruals) in t-1 period-one
year before when CG level calculated- would increase earnings together with the CG level in t period.
Firstly, firms were divided in two groups: whose discreationary accruals is smaller than zero and greater
than zero.
Table 10. One Sample T Test Results
Firms whose discretionary accruals are below than 0

Mean
0,0341910

Test Value
0

t
1,901

p
0,074

As seen, at 0,10 exact significance level, discreationary accruals mean is different from 0 , the mean
in case of no EM activities. This finding leads to analyzing the relationship between CG level and both
EBIT/Tot. Ass. and also Tobins Q in firms havingEM facilities in earning reducing way in 2009.
Table 11. Regression Analysis Results of CG Level on EBIT/ Tot.Ass.
REGRESSION ANALYSIS
VARIABLES
Dependent Variable
EBIT/ Tot.Ass.
Independent Variables
CG Level

0,871

0,000

R2

0,745

0,000

As seen on Table 11, the coefficient of CG level in the context of the model encompassing H5a
increased to 0,871 from 0,623. Last, H7a is supported. Below, Table 12 showsH7b is supported as well.
Table 12. Regression Analysis Results of Corporate Governance on Tobins Q
REGRESSION ANALYSIS
VARIABLES
Dependent Variable
Tobins Q
ndependent Variables
Corporate Governance Level

0,823

0,000

R2

0,658

0,000

4. Conclusion
Currently, the structures of the ownership and the control diverge from eachother owing to fact both
that firms have been growing and also that the need of senior executives is increasing. This divergency
grounding on mutual benefits at first leads to the conflict of interest in several ways in the firm since
senior executives with controlling power exploit their private knowledge for their self interests. Agency
problems originated from this discrimination between the ownership and the control causes serious
damages to firms. To reduce the costs stemmed from these problems, a variety of individuals and
institutions gave some suggestions and made arrangements, all of which created the concept of CG.
In our study, the determinants and the effects of CG has been investigated on a sample of firms traded
on ISE. In this direction, studys theoretical model has formed in line with the relationships in extant
literature. In the research model, CI ratio, firm size, external financing needs are supposed as the
determinants of CG level and an array of tests has been made in searching for these presuppositions to be
supported or not. On the other side, the effects of CG level have been identified through the analyses of

Selim Aren et al. / Procedia - Social and Behavioral Sciences 150 (2014) 1061 1070

the relationships between CG level, firm performance and foreign investor preferences. Hence, it was
found that FV-hence firm size- is the most crucial determinant of CG in firms. Parallel with literature, this
finding can be interpreted in way that firms choose improving their CG level in order not to damage their
institutional reputation. Moreover, it is seen that CI ratio is another major determinant of CG level. The
indirect effect of CI ratio on CG level is conveyed through FV since it mediates this relation. Namely,CI
ratio together with external financing needs can effectCG level only through FV. The results also
exhibited thatCG level enhances firm performance. Beside, this effect was moderated by appearance of
agency costs afterEM facilities in last year. Firms can improve their financial performance via CG
practices in the same way which they eliminate the costs stemmed from interest conflicts related
asymmetric information. Last, it is also concluded that foreign investors take the firms CG level into
account on their firm preferences.
This study remained limited with the firms only traded on ISE regarding both the access to financial
statements, the information about independence board structure of firms and also acquisition of the
knowledge on their foreign investors share. Turkish Commercial Code newly enacted by 2012
necessitates all firmsto report their financial statements. This enables working with larger samples in the
future, giving way to reach more generalizable results.Future studies can carry our study furher if they
take this change into account.
References
Aksu, M., Kseda A. (2006), Transparency & Diclousure Scores and Their Determinants in the Istanbul Stock Exchange,
Corporate Governance: An International Review, 14(4), 277-296.
Alpkan, L., Ergn, E., Bulut . ve Ylmaz., C. (2005), irket Giriimciliinin irket Performansna Etkileri, Dou niversitesi
Dergisi, 6(2), 175-189.
Anderson, R. C., Mansib, S. A. and Reeb, M. R. (2003), Founding Family Ownership and The Agency Cost of Debt, Journal of
Financial Economics, 68(2), 263285.
Aren, S. (2003), Yneticilerin Kar Ynetimi le lgili Tutumlar ve MKBde Bir Uygulama, Yaymlanmam Doktora Tezi, Gebze
Yksek Teknoloji Enstits, Trkiye.
Aren, S. (2009), Ynetim Deiiklii ve Finansal Rapor Maniplasyonlar, Dou niversitesi Dergisi, 10 (1), 2009, 1-10.
Aren, S., Alpkan, L., Sezen, B., and Gnc, Z. A., (2012), Drivers of Firms` Debt Ratios: A Comparative Study on The Turkish and
Taiwanese Stock Exchange Markets, Journal of Business Economics and Management, 13(1),53 70.
Bae, K. H. and Goyal, V. K., (2010), Equity Market Liberalization and Corporate Governance, Journal of Corporate Finance,
16(5), 609621.
Baek, Jae-Seung, Kang, Jun-Koo and Park, K. S. (2004), Corporate Governance and Firm Value: Evidence From Korean Financial
Crisis, Journal of Financial Economics, 71(2), 265-313.
Barniv, R.R. and Bao, Y. (2009), Where Corporate Governance and Financial Analysts Affect Valuation, Journal of International
Financial Management & Accounting, 20(3), 240-273.
Bhagat S., and Black B. (1999), The Uncertain Relationship Between Board Composition and Firm Performace, Business Lawyer,
54(3), 921-963.
Chen, W. P. , Chung, H. , Hsu, T. L. and Wu, T. L. (2010), External Financing Needs, Corporate Governance, and Firm Value,
Corporate Governance: An International Review, 2010, 18(3), 234249.
Coles, J. L., Daniel, N.D. and Naveen L. (2008), Boards: Does One Size Fit All ?, Journal of Financial Economics, 87(2), 329-356.
Delgado-Garca, J. B., Quevedo-Puente, E. de. and Fuente-Sabat J. M. (2010), The Impact of Ownership Stucture on Corporate
Reputation: Evidence From Spain, Corporate Governance: An International Review, 8(6), 540556.
Demirag, . and Serter, M. (2003), Ownership Patterns and Control in Turkish Listed Companies, Corporate Governance: An
International Review,11(1), 40-51.
Dyck, A.A. and Zingales, L. (2004), Private Benefits of Control: An International Comparison, Journal of Finance, 59(2), 537600.
Faccio, M. and Lang, L. H. P. (2002), The Ultimate Ownership of Western European Corporations, Journal of Financial
Economics, 65(3), 365395.
Filatotchev, I., and Nakajima C. (2010), Internal and External Corporate Governance: An Interface between an Organization and its
Environment, British Journal of Managament, 21(3), 591-606.

1069

1070

Selim Aren et al. / Procedia - Social and Behavioral Sciences 150 (2014) 1061 1070

Forbes, D. P. and Milliken, F. (1999), Cognition and Corporate Governance: Understanding Board of Directors as Strategic
Decision-Making Groups, Academy of Management Review, 24(3), 489-505.
Gompers, P. A., Ishii, J. L. and Metrick, A. (2003), Corporate Governance and Equity Prices, Quarterly Journal of Economics,
118(1), 107-55.
Goodstein, J., Gautam, K. and Boeker, W. (1994), The Effects of Board Size and Diversity on Strategic Change, Strategic
Management Journal, 15(3), 241-250.
Guest, P. M. (2008), The Determinants of Board Size and Composition: Evidence Frm The UK, Journal of Corporate Finance,
14(1), 51-72.
Hadani, M., Goranova, M. and Khan R., (2011), Institutional Investors, Shareholder Activisim, and Earnings Management, Journal
of Business Research, 64(12), 1352-1360.
Hazarika, S., Karpoff, J.M. and Nahata, R. (2012), Internal Corporate Governance, CEO Turnover, and Earnings Management,
Journal of Financial Economics 104(1), 44-69.
Jensen, M. C. and Meckling,W. H. (1976), Theory of the firm:Managerial behavior, agency costs, and ownership structure, Journal
of Financial Economics, 3(4), 30560.
Jensen, M., (1993), Presidential Adress: The Modern Industrial Revolution, Exit and The failure of Internal Control Systems,
Journal of Finance, 48(3), 831-880.
Jiang, L. and Kim J. B. (2004), Foreign Equity Ownership and Information Asymmetry: Evidence From Japan, Journal of
International Financial Management and Accounting, 15(3), 185-211.
Kim, K. A., Chatjuthamard, P. K. and Nofsinger, J. R. (2007), Large Shareholders, Board Independence, and Minority Shareholder
Rights: Evidence From Europe, Journal of Corporate Finance, 13(5), 859880.
Klapper, L. F. and Love I. (2004), Corporate governance, investor protection, and performance in emerging market, Journal of
Corporate Finance, 10(5), 703-728.
Klein, A. (2002), Audit Committee, Board of Director Characteristics, and Earning Management, Journal of Accounting and
Economics, 33(3), 375-400.
Kula, V. (2005), The Impact of the Roles, Structure and Process of Boards on Firm Performance: evidence from Turkey, Corporate
Governance: An International Review,13(2), 265-276.
La Porta, R, Lopez-de-Silanes, F.,Shleifer, A.(1999), Corporate Ownership Around The World, Journal of Finance, 54(2), 471-517.
La Porta, R., Lopez-de-Silanes, F., Shleifer, A. and Vishny, R. W. (2000), Investor Protection and Corporate Governance, Journal
of Financial Economics, 58(1-2), 327.
La Porta, R., Lopez-de-Silanes, F., Shleifer, A. and Vishny, R. W. (1998), Law and Finance, Journal of Political Economy, 106(6),
11131155.
Lasfer, M. A. (2006), The Interrelationship Between Managerial Ownership and Board Structure, Journal of Business Finance and
Accounting 33 (7-8), 1006-1033.
Leuz, C., Nanda, D. and Wysocki, P. D. (2003), Earnings Management and Investor Protection: An International Comparison,
Journal of Financial Economics, 69(3), 505527.
Levy Marc (2007), Control in Pyramidal Structures, Working Paper, Brussels Dulbea University.
Linck, J.S., Netter, J.M., Yang, T. (2008), The Determinants of Board Structure, Journal of Financial Economics, 87(2), 308-328.
Mak, Y.T. and Roush, M. L.(2000), Factor Affecting the Characteristics of Board of Directors: An Empricial Study of New Zealand
Initial Public Offering Firms, Journal of Business Research, 47, 147-159.
Mande V., Young K. Park, and Myungsoo Son (2012), Equity or Debt Financing: Does Good Corporate Governance Matter?,
Corporate Governance: An International Review, 20 (2), 195-211
Mangena, M., Tauringana, V. (2007), Disclousure, Corporate Governance and Foreign Share Ownership on Zimbabwe Stock
Exchange, Journal of International Financial Management and Accounting, 18(2), 53-85.
Mitton, T. (2002), A Cross-firm Analysis of the Impact of Corporate Governance on the East Asian Financial Crisis, Journal of
Financial Economics, 64(2), 215-241.
Mizuno, M. (2010), Intitutional Investors, Corporate Governance and Firm Performance in Japon, Pacific Economic Review, 15(5),
653-665.
Ruiz-Mallorqu, M. V. and Santana-Martn, D. J. (2011), Dominant Institutional Owners and Firm Value, Journal of Banking &
Finance, 35(1), 1181
29.
Shinong, W., Nianhang X. and Qingbo Y. (2009), State Control Investor Protection, and Ownership Concentration: Evidence From
China, Corporate Governance: An International Review, 17(2), 176192.
Shleifer, A. and Vishny, R. (1997), A Survey of Corporate Governance, Journal of Finance, 52(2), 73783.
Stuart; L. G. (2006), Recent Development in Corporate Governance: An Overview, Journal of Corporate Finance, 12(3), 381-402.
Yu, F. (2008), Analyst Coverage and Earnings Management, Journal of Financial Economics, 88(2), 245-271.