The Impact of Corporate Governance, Financial Performance, and Technology Investment on Firm Value of Listed Companies in The Stock Exchange of Thailand
Article Sidebar
Main Article Content
Abstract
This research aims to investigate the impact of corporate governance (CG), financial performance (ROA), and IT investment on firm value (Tobin's Q) using a quantitative approach. Data from 935 listed companies on the Stock Exchange of Thailand between 2018 and 2022 were analyzed using descriptive statistics, percentages, means, Pearson correlation coefficients, and multiple regression analysis. The results reveal that the average CG score was 86.63, the average ROA was 23.34%, the average IT investment was 0.26, and the average Tobin's Q was 1.03. Multiple regression analysis shows that CG, ROA, and IT investment significantly impact firm value at the 0.01 significance level. The finding that IT investment has a positive impact on firm value is a novel contribution, as technology can enhance operational efficiency, reduce costs, increase revenue, and project a modern image, all of which contribute to firm value and reflect investor expectations for the firm's future. Investors or firms can utilize the model developed in this study to analyze and make informed decisions regarding IT investments. Based on empirical evidence, the researchers substituted values into the equation and found that the prediction accuracy of the equation was 16.2%. The remaining 83.8% may be attributed to other factors influencing firm value.
Article Details
This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.
Views and opinions appearing in the Journal it is the responsibility of the author of the article, and does not constitute the view and responsibility of the editorial team.
References
Alfalah, A. A., Muneer, S., & Hussain, M. (2022). An Empirical Investigation of Firm Performance Through Corporate Governance and Information Technology Investment with Mediating Role of Corporate Social Responsibility: Evidence from Saudi Arabia Telecommunication Sector. Frontiers in Psychology, 13, 959406. https://doi.org/10.3389/fpsyg.2022.959406
Beiner, S., Drobetz, W., Schmid, F., & Zimmermann, H. (2004). Is Broad Size an Independent Corporate Governance Mechanism?. Kyklos, 57(3), 327-356. https://doi.org/10.1111/j.0023-5962.2004.00257.x
Bidhari, S. C., Salim, U., & Aisjah, S. (2013). Effect of Corporate Social Responsibility Information Disclosure on Financial Performance and Firm Value in Banking Industry Listed at Indonesia Stock Exchange. European Journal of Business and Management, 5(18), 39-47.
Black, S. E., Devereux, P. J., & Salvanes, K. G. (2005). The More the Merrier? the Effect of Family Size and Birth Order on Children's Education. The Quarterly Journal of Economics, 120, 669-700. https://doi.org/10.1162/0033553053970179
Brown, A. (2020). Technology and Innovation: Drivers of Business Growth. International Journal of Business Innovation, 8(1), 78-91.
Ehikioya, B.I. (2009). Corporate Governance Structure and Firm Performance in Developing Economies: Evidence from Nigeria. Corporate Governance, 9, 231-243. https://doi.org/10.1108/14720700910964307
Garcia, L. (2018). Enhancing Customer Experience through Technology: A Case Study of Digital Transformation. Journal of Customer Satisfaction and Loyalty, 5(4), 56-68.
Gartner. (2023). IT Spending forecast in 2023. https://www.gartner.com
Gunasekaran, A., Love, P.E.D., & Rahimi, F., & Miele, R. (2001). A Model for Investment Justification in Information Technology Projects. International Journal of Information Management, 21(5), 349-364. https://doi.org/10.1016/S0268-4012(01)00024-X
Husnah, N., Hamidah, R., & Sari, R. D. (2018). The Effect of Corporate Social Responsibility Disclosure on Financial Performance: Evidence from Indonesian Public Listed Companies. Journal of Accounting and Business Research, 19(1), 1-10.
International Institute for Management Development (IMD). (2023). IMD World Competitiveness Ranking 2023 - Thailand's Performance. https://www.imd.org/centers/wcc/world-competitiveness-center/rankings/world-competitiveness-ranking/
McColgan, P. (2001, May 22). Agency theory and corporate governance: A review of the literature from a UK perspective. Department of Accounting & Finance, University of Strathclyde, Glasgow, United Kingdom. https://citeseerx.ist.psu.edu/document?repid=rep1&type=pdf&doi=79c52954af851c95a27cb1fb702c23feaae86ca1
Okoye, U. C., Nwokoma, N. J., & Okoye, C. O. (2022). The impact of financial performance and corporate governance on firm value: A study of listed companies in the banking sector of Nigeria. International Journal of Financial Research, 13(2), 1-18.
Shih, E., Kraemer, K. L., & Dedrick, J. (2007). Determinants of country-level investment in information technology. Management Science, 53(3), 521-528. https://doi.org/10.1287/mnsc.1060.0670
Smith, J. (2021). The Impact of Technology Adoption on Business Performance. Journal of Business and Technology, 10(2), 45-62.
Sri-suwan, R. (2020). The relationship between financial performance and firm value: Evidence from listed companies in Thailand. Journal of Accounting, Kasetsart University, 59(4), 232-245.
Stock Exchange of Thailand. (2023, Jan. 25). List of companies listed on the stock exchange. https://www.set.or.th
Tambe, P. (2014). Big Data Investment, Skills, and Firm Value. Management Science, 60, 1452-1469. https://doi.org/10.1287/mnsc.2014.1899
Tobin, J. (1982). Money and finance in the macroeconomic process. Journal of Money, Credit and Banking, 14(2), 171-204. https://doi.org/10.2307/1991638
Zaharia, C., & Zaharia, I. (2012). Corporate governance and the market value of firms. Economics, Management and Financial Markets, 7(4), 227-232.