Corporate governance in emerging countries: a case study of Bangladesh

[Truncated abstract] Over the last twenty-five years, concerns about inadequate corporate governance (CG) practices have led to a plethora of legislative amendments, and to the issuance of many 'best practice' CG codes or guidelines world-wide. This thesis examines a series of related research questions on outcomes of CG practices, all in the context of one emerging economy, Bangladesh. Specifically, I examine, in the Bangladesh setting: the determinants of country-level CG reform; the influence of country-level reform and firm-characteristics on firm-level CG practices; the influence of firm-level CG 'quality' on corporate transparency; and the association between a firm‘s CG and its financial performance, its stock market liquidity, and its cost of (equity) capital. These questions are particularly relevant to Bangladesh, where reform has occurred since the early 1990's, mostly funded by International Financial Agencies (IFAs), with the aim of substantially improving the quality of CG. The low base from which reform began makes Bangladesh an especially interesting setting in which to study the reform process overall, and its implications for individual firms. Other characteristics that make Bangladesh an interesting setting are the historically limited incentives for public companies to be more transparent in their reporting practices, the limited role played by institutional investors in pressuring companies to improve their CG practices, the largely 'unsophisticated' shareholder base, comparatively weak and out-dated laws to protect the rights of minority shareholders, and doubts about the effectiveness of monitoring and enforcement in curbing undesirable behaviour in financial markets. I have used many data sources. To measure governance quality, I constructed a comprehensive checklist for non-financial listed companies considering all relevant laws in Bangladesh, and corporate governance appraisal systems used elsewhere.