Corporate Governance's Characteristics and Financial Performance in the Innovative SMEs

This chapter focuses on the relationship between corporate governance and financial performance over the period 2015–2019 on a dataset of Italian Innovative Small and Medium-sized Enterprises (SMEs). The character- istics of corporate governance are investigated with respect to three main aspects: workers’ education attainment, ownership of software or patent and prevalence of women, young and foreigners in the corporate board. In order to deal respectively with time-invariant corporate variables and the endogeneity issue related to past firm performance, Hausman–Taylor (HT) model and two System Generalized Method of Moments (Sys- GMM) have been employed for the examination of the aforementioned relationship in both static and dynamic terms. Results show that most of the considered corporate governance variables, affect innovative SMEs’ profitability except for the ownership of software or patent