Business Analyst Journal

The paper analyses the relationship between Corporate Governance Disclosure Index (CGDI) and Firm Performance of 38 non-financial NSE listed companies in India for a period of five years from 2008-2012. The objective of the paper is to examine the level of disclosure and the impact of such disclosure on the firm performance of NSE Nifty companies.The firm performance measures include Tobin’s Q, Market to Book Value Ratio, Market Value Added, Return on Assets, Return on Capital Employed and Return on Equity. Econometric analysis is performed using Year-wise OLS Regression, Pooled OLS and Panel Data Models. The results of year-wise OLS regression analysis provided a strong evidence of strengthening of the relationship between CGDI and firm performance measures over the years. In brief, the research findings reveal that CGDI has a positive impact on firm performance based on market based measures as well as accounting based measures. The paper concludes firms that disclose more are likely to result in higher performance. The results also imply that firms are more willing to disclose more information leading to enhanced corporate governance mechanisms but there is still scope for the improvement.