Governance and Performance in Emerging Markets

March 11, 2019

In 2016, IFC’s Corporate Governance Group launched an empirical study to explore the link between the quality of IFC portfolio clients’ corporate governance and their financial and economic performance over a four-to-five-year period. Using client surveys and portfolio financial, economic, and development outcome data, IFC tested the hypothesis that better corporate governance is associated with better performance over a defined period.

The analysis of collected data showed that investing in companies with better corporate governance at the time of disbursement of IFC’s investment is associated with a better average credit risk rating by almost 1.50 points throughout the IFC investment period.

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