Company Performance & Corporate Governance in Emerging Economy – Evidence from Textile Industries of Bangladesh

Company Performance & Corporate Governance in Emerging Economy

Abstract

This research investigates the effect of corporate governance practices in improving business performance in Bangladesh's textile industry, aiming to identify best practices and enhance Bangladeshi firms' competitiveness. The research used data from randomly selected 25 textile companies listed on Dhaka Stock Exchange to analyze the relationship between corporate governance practices and firm performance for the period 2012 to 2023. The research combines financial data analysis with FGLS regression techniques to explore how corporate governance practices impact on firm success in Bangladeshi textiles. Corporate governance mechanisms significantly effect firm performance; careful management of leverage levels is crucial for optimizing performance in this context. Corporate leaders, legislators, investors, and other stakeholders can use these insights to improve corporate governance standards and ensure that businesses function with integrity and efficiency. Strong corporate governance mechanisms, such as an independent board, effective audit committees, and shareholder rights protection are critical to improving firm performance and long-term success.