An Analysis of the Emerging Nation's Corporate Governance Practices and Economic Performance

This study examines the impact of corporate governance practices on the financial performance of non-financial firms in India, an emerging economy, over the period 2015 to 2024. Using panel data from 400 publicly traded companies, employing regression analysis and the Generalised Method of Moments (GMM) to investigate the correlation between governance variables—namely board size, board attendance, CSR committees, and audit committee independence—and essential financial metrics (ROA, ROE, and EPS). The research also examines the moderating influence of Economic Policy Uncertainty (EPU) on this connection. The results demonstrate that the majority of corporate governance characteristics have a beneficial impact on financial performance, but economic policy uncertainty diminishes these impacts, especially with audit committee and board-related elements. The GMM analysis validates the reliability of these findings by addressing concerns of endogeneity and simultaneity. Overall, the study underscores the dual importance of strong internal governance and stable external policy environments in enhancing corporate performance in emerging nations like India.