Analysis of Relationship Between Corporate Governance Quality and Firm Market Value

There is increasing evidence that broad measures of firm-level corporate governance predict higher share prices. However, almost all prior work relies on cross-sectional data. This work examines the positive relationship between corporate governance index and market capitalization of the company on the basis of panel data. The paper consists of detailed review of the literature, several variants of calculations of corporate governance index was proposed. The selected calculation method is described in detail.The sample includes twenty Russian firms, listed on MICEX and foreign exchanges. Observing time period is 2013-2015. The study found a statistically strong correlation between the quality of management and the market value of firms. Some control variables to obtain meaningful and some are not. Overall, the study confirmed the positive effect of corporate governance on the market value of the company.