The impact of corporate governance practices on firm’s performance: An empirical evidence from Indian tourism sector

Abstract. The growth of Indian companies in recent years has led to a change in the nature of the economy which attracted outsider investors from developed countries who demanded robust corporate governance practices from Indian companies which made regulators and competitors gave a great effort to restructure corporate governance. Therefore, this paper aims to investigate the effect of corporate governance practices on firms’ performance, with a special reference to the Indian tourism sector. The study uses a panel dataset of 39 hotels listed on Bombay Stock Exchange (BSE) for the period from 2013/2014 to 2015/2016. The ordinary least square regression model is run for estimating the results. Findings show that board directors’ size and audit committee’s size negatively impact the performance of Indian hotels, while board directors’ composition and diligence, the audit committee’s composition and diligence, and foreign ownership positively affect the performance of Indian hotels measured by accounting proxies. Results also reveal that board directors’ size, audit committee’s size, and foreign ownership positively impact the Indian hotels’ performance measured by marketing proxies, whereas board directors’ composition; board directors’ diligence; audit committee’s composition; and audit committee’s diligence have a negative impact on the performance of Indian hotels.