Linking Governance Quality to Financial Sustainability: Insights from Corporate Finance and Accounting Research

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Published: 2025-10-22
DOI: https://doi.org/10.53555/jtar.v21i2.33
Keywords:
Corporate Governance, Financial Sustainability, Accounting Quality, Structural Equation Modeling, Organizational Performance

Main Article Content

Dr. Manoj P. K.
Advocate Varun Goel
Raja Ghosh
Dr. Maanish Chava
Dr. Amit Kansal
Dr. Priyanka Bhatt
Er Ankita Mongia

Abstract

This study examines the relationship between governance quality and financial sustainability by integrating insights from corporate finance and accounting research. Using a panel dataset of publicly listed firms, the results show that stronger governance frameworks enhance financial performance, with a one-point increase in the governance index resulting in a 0.42-point rise in Return on Assets, a 0.55-point increase in Return on Equity, and a 0.36-point improvement in Tobin’s Q ratio. The results also indicate that accounting quality partially mediates this relationship (β = 0.18, p < 0.05), improving reporting transparency and investor confidence. Additionally, firms in highly regulated sectors exhibit superior governance practices and achieve better sustainability outcomes compared to less regulated industries.

Article Details

Issue

Vol. 21 No. 2 (2025): Journal of Theoretical Accounting Research

Section

Articles
Creative Commons License

This work is licensed under a Creative Commons Attribution 4.0 International License.

Author Biographies

Dr. Manoj P. K.

Professor and Head, Department of Applied Economics, Cochin University of Science and Technology (CUSAT), Kochi, Kerala - 682 022. 

Advocate Varun Goel

Criminal Defense Counsel, District Court, Jagadhri, Haryana, India | Punjab & Haryana High Court, Chandigarh, India

Raja Ghosh

Research Scholar, ICFAI University Jharkhand, Ranchi 

Dr. Maanish Chava

Associate Professor, HOD, Roorkee College of Business Studies, Haridwar University 

Dr. Amit Kansal

Professor, Teerthanker Mahaveer University 

Dr. Priyanka Bhatt

Associate Professor, GTU School of Management Studies, Gujarat Technological University 

Er Ankita Mongia

Manager, Department of Banking and Operations, Union Bank of India 

How to Cite

Linking Governance Quality to Financial Sustainability: Insights from Corporate Finance and Accounting Research. (2025). The Journal of Theoretical Accounting Research, 21(2), 103-109. https://doi.org/10.53555/jtar.v21i2.33

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