THE ECONOMIC RELATIONSHIP BETWEEN CORPORATE GOVERNANCE QUALITY AND INVESTOR CONFIDENCE
Keywords:
Corporate governance, investor confidence, information asymmetry, transparency, risk management, cost of capital, institutional investors, market valuation, financial markets,emerging markets.Abstract
This research explores both causal and correlational links between the quality of corporate governance and the level of investor confidence. Using an evidence-driven analytical framework, the study suggests that well-structured corporate governance systems play a significant role in strengthening investor confidence by minimizing information asymmetry, reducing perceived investment risk, and enhancing the efficiency of managerial decision-making. Findings from global financial markets indicate that companies with stronger governance practices generally experience higher market valuation, lower financing costs, and greater participation from institutional investors. Overall, the results support the view that corporate governance serves as a key factor influencing investment efficiency and the overall stability of financial markets.
