Corporate governance and equity finance: an emerging economy perspective

Faizul Haque

Research output: Contribution to journalArticlepeer-review

1 Citation (Scopus)


Purpose – This paper aims to investigate whether firm-level corporate governance has an influence on the equity financing patterns in an emerging economy such as Bangladesh.
Design/methodology/approach – The regression framework uses a questionnaire survey-based corporate governance index (CGI) comprising five dimensions – ownership structures, shareholder rights, independence and responsibilities of the board and management, financial reporting and disclosures and responsibility towards stakeholders. In addition, a number of semi-structured interviews have been carried out with the relevant stakeholders.
Findings – The results suggest a statistically significant positive relationship between CGI and equity capital and, thus, confirm the prediction of the agency theory.
Research limitations/implications – This study does not address endogeneity and reverse causality issues with respect to the relationship between CGI and equity finance.
Practical implications – Firms should improve their legal compliance and voluntary activism in corporate governance matters to ensure increased access to equity finance.
Originality/value – This study is among the first to examine the relationship between overall corporate governance quality and equity finance of a firm from the perspective of a bank-based emerging economy.
Original languageEnglish
Pages (from-to)233-250
Number of pages18
JournalJournal of Financial Economic Policy
Issue number3
Publication statusPublished - 2015


  • Bangladesh
  • Equity finance
  • Corporate finance and governance
  • Agency theory

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