Ownership Structure and Corporate Governance in the Case of Turkey

Turkey is one of the eight countries that currently have a corporate governance index for firms listed on its main stock exchange (Borsa Istanbul). As in the case of many emerging markets, the country’s business landscape is characterized by family owned conglomerates some of which have recently become a favorite target for foreign direct and portfolio investment. By using corporate governance data on 22 publicly traded Turkish companies we estimate the determinants of corporate governance ratings for these companies with a focus on ownership structure. Our results show that family ownership has a negative impact on corporate governance ratings while foreign ownership has a weak but positive effect.