Abstract

This paper examined the relationship between governance mechanism and firm performance by using data obtained from listed firms from the Market for Alternative Investment in Thailand. Given the centrality of the principal-agent problem, the research found a correlation between principal-agent and firm size. The conclusion that can be drawn is that larger organizations can experience bigger principal-agent problems. Nonetheless, small and medium-sized enterprises (SMEs) may have advantages over this problem due to their size and small- to medium-sized governance structure. The main purpose of this research is to establish linkages between the various factors of governance mechanism and the performance of smaller listed firms. The study found that by using different firm performance indicators, some forms of a relationship between corporate governance mechanisms and corporate performance become apparent. By using different firm performance indicators, some forms of a relationship between corporate governance mechanisms and corporate performance become apparent. The results showed significant relationships between corporate governance mechanisms and corporate performance across all the different models, but to different extents.