Abstract
In this paper we investigate the impact of a voluntary corporate governance initiative on firm value in an emerging market context. We consider the corporate governance code introduced by the Stock Exchange of Thailand in 2002, applying to all listed firms on a “comply-orexplain” basis. We find that a one standard deviation increase in a firm-level code adoption index is related to a 10% increase in firm value in the period 2003-2005. Our results show that conclusions of empirical studies on voluntary code adoption in developed markets – typically finding no significant impact on firm value – cannot simply be extrapolated to emerging markets.
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