Table 8. Results of system GMM model on ROA with DE variable excluded at 0,15 significance level. Source: Calculated by author in Stata.

Finally, we added to existing sGMM model variables characterizing the share of ownership and industry in which each firm operates (Table 9). Significant estimates of the coefficients were obtained by adding variables that characterize ownership structure (Governmentownership, Foreignownership) and dummy variables that characterize food and beverages and construction industries (Industryfood, Industryconstruction). However, in this case, the dummy variable of 2018 became insignificant.

Table 9. Results of system GMM model on ROA with Ownership structure and industry variables added excluded at 0,15 significance level. Source: Calculated by author in Stata.

Consequently, sGMM model on ROA has the following form:

Research findings

On this basis, from estimations results of RE model for ROE and sGMM model for ROA it can be concluded that:

· The hypothesis regarding the effect of firm size on firm performance is ambiguous: the random effects model shows that ROE decreases with the growth of firm size, and the sGMM model shows that the firm size has a positive effect on the growth of ROA; Since sGMM model tend to be more appropriate for analysis of panel data (Akbar, S. et al., 2016, Nguyen et al., 2015, Wintoki et al., 2012), we can conclude that the hypothesis on positive association between firm size and firm performance is supported, which corroborated the findings of most studies on corporate governance and firm performance (Iqbal et al., 2019, Black et al., 2015; Bae et al., 2012 etc.)

The impact of firm age on firm performance growth is supported by not all models. In those models where it is confirmed, the effect is opposite to the expected one - the older the company, the worse its firm performance. This can be explained by the fact that the older the company, the greater the amount of assets and liabilities it can operate, and accordingly, the more they are, the lower their profitability; Moreover, it can explained by the high share of state ownership in older companies, since according to our findings (Figure 1.1) the majority of old companies in Central Asia have 50% state ownership and higher, which is also consistent with literature on Central Asian corporate governance (Ashurov, 2015, Khamidulin et al., 2018, Chinkulov, 2016)

· Models do not give a single estimation on the impact of financial leverage on firm performance: it ranges from the negative relationship (in RE - model) to zero (in sGMM). Thus, in both cases, the observed effect does not meet expectations;

· Models give different estimates regarding the impact of the auditing firm: the fact that the financial statements of the company are audited by BIG 4 companies do not affect the return on equity and leads to a decrease in return on assets. This is probably due not to the audited firm itself, but to the fact that the services of these firms are bought by larger firms, whose return on assets is lower;

· Both types of models show that the increase in the number of the Board of Directors is accompanied by a decrease in return on assets and equity, i.e. the null hypothesis is rejected;

· The CEO duality does not affect the return on assets and has a negative impact on the return on equity, i.e. the null hypothesis is confirmed. This result is consistent with previous studies (Hernandez et al., 2019, Ciftci et al.,2019, Pillai and Al-Malkawi, 2018).

· Regarding the ownership structure, the models do not give a clear answer whether the growth of the government's share in the company affects firm performance: in one case

(RE model on ROE) we saw a positive effect, and in the other (sGMM- ROA model) - the negative effect. As for the share of foreign capital, the models give a consistent result in that the higher it is, the lower the firm performance;

· Different types of models distinguish different effects of industry affiliation on firm performance: in the case of RE models on ROE, the effect of the oil and gas and construction industries is distinguished, and the effect of firm performance growth in these industries is higher than in all others. And in the case of sGMM model on ROA, the construction and food and beverages industries have worse firm performance than other companies, ceteris paribus.

Overall, the confirmation or rejection of various research hypotheses was primarily influenced by the model estimation method used. Concerning one of the hypotheses based on the results obtained, one can make an unambiguous conclusion: for the sample of companies under consideration, the size of the Board of Directors does not affect their firm performance.

Conclusion

The present study was designed to determine the relationship of corporate governance and firm performance in Central Asia. Even though the results of this research showed that not all hypotheses were supported, we may conclude that corporate governance has a significant influence on firm performance of companies in Central Asia whereas the size of the board does not affect firm performance. This conclusion opens a new venue for future studies in this field which may address how to better understand the corporate governance factor that influence firm performance. The scope of this study was limited in terms of poor information disclosure of companies in Central Asia. The study showed that most companies in this region poorly implement principles of corporate governance by disclosing considerably few information about the company performance, which consequently leads to skepticism of investors and other interested parties. This substantially slows down the economy not only of one country, but also the whole region of Central Asia. That is why it is extremely important to research this area and establish a greater degree of accuracy on this matter.

Due to time and data accessibility constraints, the time period of this thesis only covers 4 years. As the number of companies implementing international corporate governance standards in Central Asia is increasing and information disclosure becoming gradually prevailing, it would be interesting to perform another research on a larger data set with a longer time period including data on Turkmenistan and Tajikistan. In addition, this study provides a start point for future studies on relationship between corporate governance and firm performance in Central Asia in terms of deeper analysis of government ownership as a main indicator of corporate governance in companies in Central Asia. It is also recommended to perform a comparative analysis of corporate governance in Central Asia and in other developing countries in order to deeper understand the reasons why the standard hypothesis that were supported in studies on developed countries did not work on developing countries located in Central Asia.

As regards the practical implication of current study, the findings and conclusions of a research can be used in corporate governance level rating systems development, since for now monitoring and rating systems are key measuring instrument in countries of Central Asia. Moreover, this study extends a growing stream of literature on Central Asia which focuses on the development of corporate governance system and its efficiency. Therefore, the academic community can use the literature review and results of the current study in the development of their research on corporate governance in Central Asia. This study also encourages Central Asian companies' directors and managers to pay more attention on ownership structure and the board of directors in order to improve firm performance.

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