[2008년 제 1차] Value Information of Corporate Decisions and Corpor
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2008-02-25
Extant literature reveals that sound corporate governance practices significantly enhance firm value. It is mostly unrevealed, however, how sound corporate governance affect firm value. This paper focuses on this issue by providing a direct link between corporate governance practices and strategic corporate decisions such as investment, financing, dividend policies and cash holdings. Applying a unique data set of firm-level corporate governance practices provided by the Korea Corporate Governance Service (KCGS) into Fama and French (1998)`s framework, we expect that corporate governance practices affect firm value by enhancing value implications of those firm-level decisions. The findings show that value information of financing, investment, and dividend decisions is strong for firms with sound corporate governance practices.