Corporate governance and company value interaction: An application in the BIST manufacturing sector

With the liberalization and globalization process, classical management structures were inadequate to meet the needs of firms and the concept of Corporate Governance was born as a new management approach. In the 2000s, the need for corporate governance increased after the scandals in large firms, and the states had to take clearer steps to protect small shareholders. Thus, the management structures of the enterprises have been strengthened with new regulations. These regulation are the basis for the development of corporate governance. In this study, it has been investigated whether there is a significant relationship between corporate governance factors and firm values of firms operating in manufacturing sector in BIST 100 index. The quarterly data of the 39 companies included in the scope of the study between March 2011 and September 2018 were examined. In the study, while the dependent variable is the stock closing value; The independent variables are the free float ratio, the size of the board of directors, whether the general manager is a board member, the largest shareholder ratio, the total assets and the leverage ratio. As a result of the panel data analysis, the relationship between company value and corporate governance factors was determined. Keywords: Corporate governance, firm value, manufacturing sector, panel data analysis, Borsa Istanbul