The Link between Corporate Governance and Firm Performance in the Nordic Countries

Abstract

This study aims to explain the link between corporate governance and firm performance in the Nordic countries. We construct a model for 190 Nordic firms with Tobin’s Q as the dependent variable, Corporate Governance Index as the independent variable while controlling for Total Assets, Financial Risk, Systematic Risk, Unsystematic Risk and Growth to evaluate the impact upon firm performance during 2004-2011. We can show a positive relationship between Corporate Governance and Firm Performance as well as statistically significant control variables. Our findings suggest that corporate governance, even though implemented differently, seems to have the same effect on performance in the Nordic countries as it does in the U.S.