An Empirical Analysis on the Association between Corporate Governance Rating and Firms’ Characteristics: Evidence from MAI Thailand

The primary purpose of this paper was to investigate the association between good corporate governance and firm-related characteristics of listed firms in the Market for Alternative Investment (MAI), Thailand. The degree of good corporate governance was measured by the corporate governance rating publicly reported on the 2012 corporate governance report of Thai listed companies (CGR) by Thai Institute of Directors (IOD). Using the logistic regression analysis, results from this study revealed that the return on assets and free cash flow are significantly related to good corporate governance. Since these two variables measure the profitability of firms, it can be concluded the good governed firms have a higher profitability than the weaker ones. However, the debt-to-equity ratio, current ratio, assets turnover, firm’s growth, earnings per share, dividend yield, age of firms, and size of firms are not statistically related to good corporate governance.