Who dictates corporate governance practices in Turkey? The role of ownership structure for XKURY companies

ABSTRACT

This paper investigates the influence of ownership structure on corporate governance practices of Turkish companies listed in Borsa Istanbul Corporate Governance Index (XKURY). It proposes a context-specific ownership structure (founding families, state ownership, foreign ownership from both developed and emerging markets, and institutional investors), and publicly available corporate governance scores as indicators for corporate governance practices. The results of fixed effects panel regression analyses show that state ownership has a negative influence on weighted and non-weighted average corporate governance scores, as mainly determined by shareholder protection and board of directors-related practices during 2010–2017. The evidence regarding the other ownership categories is not sufficient over alternative estimations. Overall, the study provides a critical assessment of the role of ownership in shaping the corporate governance practices of XKURY companies.

KEYWORDS:

• Corporate governance scores
• ownership structure
• foreign ownership
• Turkish corporations
• XKURY Index

Acknowledgments

The authors are grateful to the editor and the two anonymous reviewers for the helpful comments and suggestions.

Disclosure statement

No potential conflict of interest was reported by the authors.

Note on contributors

Ebru Saygili is an Assistant Professor in the Department of International Trade and Finance, Yasar University. She completed her BA and MBA degrees in Dokuz Eylul University and received her Ph.D. at Celal Bayar University in 2011. She has eight years of working experience in financial institutions and she is a CPA under Turkish laws. She has published papers in national and international journals and books about corporate governance, corporate reports, audit and accounting information systems.

Arikan Tarik Saygili is an Associate Professor Faculty of Business, Izmir University of Economics, Turkey. He completed his BA and MBA degrees at the University of South Dakota in the United States and received his Ph.D. from Bursa Uludag University in Turkey in 2002. He worked as a research assistant and assistant professor in Balikesir University between 1998 and 2007. Professor Saygili has been continuing his academic activity in Izmir University of Economics since 2007. His main fields of interest are managerial and cost accounting, corporate governance and financial audit with specific emphasis in Computer Aided Audit Tools and Techniques.

Alina Taran is a Ph.D. candidate in Accounting at Alexandru Ioan Cuza University of Iasi, Romania, and a Lecturer of Accounting at Faculty of Business, Izmir University of Economics, Turkey. She teaches Financial Accounting, Corporate Governance, Auditing and Assurance, and International Financial Reporting and Analysis. Her main research interests are international accounting, corporate governance, financial reporting, financial analysis, and corporate finance.

Notes

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56 OECD, Corporate Governance Factbook 2017, 11–50.

57 Larcker and Tayan, “Corporate Governance Matters,” 19–56.

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61 Gurarda, Ozsoz, and Ates, “Corporate Governance Rating.”