The effect of Corporate Governance Practices on the Financial Performance of Public Enterprises in Ethiopia
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Date
2019-05
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Addis Ababa University
Abstract
The role of corporate governance in public enterprises differs from that of the private counterparts for
the principal-agent problem in this enterprises is more complicated. In this study the effects of corporate
governance practices specifically board size, board composition, board gender diversity and debt policy
are investigated in the Ethiopian public enterprises context. The main objective of the study is to explore
the theoretical and practical aspects of public enterprises, corporate governance, and their
interrelationship in the Ethiopian context. The study employed explanatory research design with an
econometric panel data of 10 Pubic enterprises that covers the period 2012 to 2017. Both correlation
analysis and fixed effects regression model is adopted after conducting the necessary tests. Board size,
board composition and board gender diversity are found to have insignificant relationship with financial
performance whereas Debt policy has negative and significant effect on the performance of public
enterprises in Ethiopia. The control variable firm size has significant and negative relationship with
financial performance while liquidity has no relationship with financial performance. The findings
suggest that public enterprises in Ethiopia may improve their financial performance depending on the
measures being used.
Description
A research project submitted in partial fulfillment of the
Requirements for the award of degree of master of
Business administration in finance
Keywords
Corporate Governance, Ethiopia, Fixed effects model, Public enterprises