Corporate Governance, Capital Investments, Profitability and Firm Value: A Case Study of Thailand During the Covid-19 Pandemic

This study investigates the moderating effect of corporate governance on the negative impact of the COVID-19 pandemic on profitability and firm valuation in Thailand. Similar to previous studies, it is documented that COVID-19 negatively affects both firm profitability and firm value. The results, based on ordinary least squares (OLS) regression analysis, show that capital investments were able to mitigate the adverse effects of the COVID-19 pandemic on firm profitability. In contrast, capital investments worsen the negative impact of COVID-19 on firm value, as measured by Tobin’s q. For companies with good quality of corporate governance practices, however, capital investments show a positive relationship with firm value during the pandemic. These results highlight the benefits of good corporate governance during an economic crisis in an emerging market.