THE RELATIONSHIP BETWEEN THE QUALITY OF CORPORATE GOVERNANCE AND BUSINESS DEBT
THE RELATIONSHIP BETWEEN THE QUALITY OF CORPORATE GOVERNANCE AND BUSINESS DEBT

Summary/Abstract: The level of quality of corporate governance can be defined as the level of fulfilment of set corporate governance standards. By using the theoretical and empirical data available so far, Bosnia and Herzegovina has the characteristics of a closed corporate governance system in both entities so, therefore, the models which measure corporate governance in countries with typical closed corporate governance systems were chosen in order to develop the model. The quality of corporate governance belongs to the group of non-financial business indicators and it signifies the level of fulfillment of international corporate governance standards. A significant portion of research shows that corporations which achieve higher standards or a higher level of standard fulfilment, as well as better corporate governance practice, also have better financial results and, therefore, larger value in the capital market. The subject of this research is to determine the relationship between the quality of corporate governance and business debt and, considering the fact that we are dealing with historical data, research will show whether corporations which had good corporate governance also had a lower level of debt and vice versa. The aim of the research is to analyze the relationship between the quality of corporate governance and debt indicators of observed corporations in Bosnia and Herzegovina.

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