اداره امور شرکت ها، نظم و انضباط در بازار خارجی و بهره وری شرکت ها

Using a sample of Australian companies over the 2000–2005 period, we examine the impact of internal corporate governance on firm's total factor productivity, taking into account the interaction between internal governance and external market discipline. Our empirical findings point to a substitution effect between product market competitiveness and firm-level corporate governance. Overall, internal corporate governance mechanisms – more efficient boards and greater CEO stock-based compensation – are effective instruments for improving firm productivity. However, internal governance is less effective when a firm faces a highly competitive product market. We find only weak empirical support for an association between firm's ownership structure and productivity, and no support for an association between industry takeover intensity and firm productivity.

Does a firm's choice of internal corporate governance measures influence firm performance? There has been a growing empirical literature on the link between corporate governance and firm performance. This paper builds on this literature by considering the differential effect of internal corporate governance on firm performance, taking into account the influence of external market discipline faced by the firm (in terms of product market competitiveness and an active market for corporate control). In contrast to the existing literature, we measure firm performance using total factor productivity (TFP henceforth). 1 Productivity, defined as the residual production output beyond and above the contribution of input costs, is arguably a better measure of the firm's real economic performance. Given that prior literature has established that good internal governance is related to better financial profitability and higher market valuation, 2 one would expect that good governance also has a positive impact on the underlying determinant of firm value, namely, productivity.

The integration of internal corporate governance, external market discipline and firm productivity has largely been overlooked in the current debate on corporate governance. Prior empirical studies, focusing largely on metrics of financial performance, have found that better internal governance is associated with enhanced firm performance. Existing literature also points out that external product market competition could serve as a substitute of internal governance, in that competition mitigates agency problems. Utilizing a sample of Australian companies over the period of 2000–2005, we test how corporate governance influences another metric of firm performance, namely, productivity. We first estimate the input shares of labour and capital costs using a Cobb–Douglas production function, and attribute the residual between actual economic output and estimated output as the measure of production efficiency, or total factor productivity (TFP). Next, we regress TFP on measures of internal corporate governance, external market discipline and their interaction terms, taking into account fixed effects.