Impact of perk expenditures and marketing expenditures on corporate performance in China: The moderating role of political connections

2018 ◽  
Vol 86 ◽  
pp. 83-95 ◽  
Author(s):  
Louis T.W. Cheng ◽  
Ricky Y.K. Chan ◽  
T.Y. Leung
Keyword(s):  
Corporate Performance ◽  
Political Connections ◽  
Marketing Expenditures ◽  
Moderating Role

The Contingent Value of Political Connections on Donations to Chinese Foundations: Exploring the Moderating Role of Transparency

2020 ◽  
Vol 53 (1) ◽  
pp. 36-63
Author(s):  
Yuan Cheng ◽  
Zhongsheng Wu
Keyword(s):  
Multilevel Analysis ◽  
Theoretical Framework ◽  
Political Connections ◽  
Different Types ◽  
The Relationship ◽  
Moderating Role

Existing studies assume that the value of political connections is homogeneous to different types of nonprofits and seldom consider their interplay with other accountability mechanisms. Based on a multilevel analysis of 2,085 foundations in China, this study builds and tests a theoretical framework of the contingent value of political connections to nonprofits, treating transparency as a moderator for the relationship between political connections and donations. Our findings suggest that while transparency is positively associated with the amount of donations obtained by foundations, political connections can help foundations obtain more donations only when their transparency score is higher than a certain threshold.

Political connections, institutional investors monitoring and stock price synchronicity

2017 ◽  
Vol 43 (11) ◽  
pp. 1236-1253 ◽  
Author(s):  
Chwee Ming Tee
Keyword(s):  
Institutional Investors ◽  
Stock Price ◽  
Agency Problems ◽  
Institutional Ownership ◽  
Political Connections ◽  
Stock Price Synchronicity ◽  
Content Type ◽  
Institutional Monitoring ◽  
Moderating Role

Purpose The purpose of this paper is to examine the association between politically connected (POLCON) firms and stock price synchronicity, and whether this association can be attenuated by institutional investors. Design/methodology/approach This paper uses an ordinary least square regression model to examine the association between POLCON firms and stock price synchronicity; institutional ownership and stock price synchronicity; the moderating role of institutional ownership on the association between POLCON firms and stock price synchronicity; institutional domiciles and stock price synchronicity; and the moderating role of institutional domiciles on the association between POLCON firms and stock price synchronicity. Findings The result shows that POLCON firms are positively associated with stock price synchronicity. Further, the author also finds that institutional monitoring, through higher ownership by local institutional investors is associated with lower stock price synchronicity. In addition, this study documents evidence that institutional investors, particularly local institutional investors can improve stock price informativeness in POLCON firms. Research limitations/implications The results suggest that POLCON firms are plagued by severe agency problems, resulting in limited flow of firm-specific information to the capital markets. However, the author shows that POLCON firm’s agency problems can be attenuated through effective monitoring by institutional investors. Further, institutional domiciles are shown to be significantly associated with stock price synchronocity. However, effective monitoring is largely driven by local institutional investors, in line with the geographical proximity theory. Practical implications The results suggest that regulators should increase their surveillance and monitoring effort, particularly on firms with close ties to the government. In particular, POLCON firms should be required to be more transparent in their corporate dealings. Additionally, auditors should intensify their audit efforts on POLCON firm to provide more reliable financial information to minority shareholders, investors and analysts. Finally, institutional investors should be incentivized by the Malaysian Securities Commission, via, the code of governance to play an effective monitoring role in Malaysian firms. Originality/value This study reveals that POLCON firms’ severe agency problems can be alleviated by effective institutional monitoring. Further result identifies institutional domiciles as a significant factor in influencing monitoring effectiveness in POLCON firms. This paper provides insights into the dynamic interaction between political connections, institutional monitoring, firm governance and capital markets behavior of an emerging market.

scholarly journals Earnings Management, Related Party Transactions and Corporate Performance: The Moderating Role of Internal Control

Risks ◽  
2021 ◽  
Vol 9 (8) ◽  
pp. 146
Author(s):  
Grzegorz Zimon ◽  
Andrea Appolloni ◽  
Hossein Tarighi ◽  
Seyedmohammadali Shahmohammadi ◽  
Ebrahim Daneshpou
Keyword(s):  
Earnings Management ◽  
Internal Control ◽  
Corporate Performance ◽  
Tobin’S Q ◽  
Corporate Value ◽  
Tobin's Q ◽  
Related Party Transactions ◽  
Q Index ◽  
Moderating Role

The primary purpose of this study is to investigate the impacts of earnings management (EM) and related party transactions (RPTs) on corporate financial performance in an emerging market, Iran. This paper also aims to examine the moderating role of internal control weakness (ICW) in the relationship between them. The study sample includes 108 Iranian manufacturing companies listed on the Tehran Stock Exchange (TSE) between 2013 and 2018, and panel data with random effects are used to test the hypotheses. When an accounting-based measure called ROA is defined as a proxy for corporate performance, the results show that there is a negative association between real earnings management (REM) and corporate financial situation, while accrual-based earnings management (AEM) and firm value are correlated positively. However, when Tobin’s Q index is defined as a proxy for corporate performance, we do not find any significant association between them. Consistent with the tunneling hypothesis or agency theory, our findings confirm RPTs damage corporate value (ROA and Tobin’s Q) because managers probably consider it a mechanism to exploit enterprise resources owing to existing conflictual interests. Moreover, purchase-related party transactions lead to lower ROA, whereas sale-related party transactions and Tobin’s Q are correlated negatively. Moreover, weak internal control has a positive moderating influence on the linkage between AEM and Tobin’s Q index. Finally, we provide robust evidence that there is a positive association between sale growth and institutional owners with ROA and Tobin’s Q, although financial leverage and mergers and acquisitions (M&A) have a destructive effect on corporate value.

scholarly journals The moderating effect of internal audit on the relationship between corporate governance mechanisms and corporate performance among Saudi Arabia listed companies

2019 ◽  
Vol 64 (4) ◽  
pp. 143 ◽  
Author(s):  
Ebrahim Mohammed Al Matari ◽  
Mahfoudh Hussein Mgammal
Keyword(s):  
Corporate Governance ◽  
Saudi Arabia ◽  
Audit Committee ◽  
Corporate Performance ◽  
Internal Audit ◽  
Moderating Effects ◽  
Corporate Governance Mechanisms ◽  
The Relationship ◽  
Moderating Role

<p>This study primarily aimed to assess the internal audit function’s ability to detect and self-report fraud. The paper investigated the moderating role of internal audit on the relationship between corporate governance mechanisms and corporate performance (ROA) and the direct effect of corporate governance characteristics and internal audit characteristics on corporate governance of firms listed in the stock market of Saudi Arabia. one hundred and eighty-eight observations obtained from forty-seven Saudi financial firms were used in this study for the years 2014-2017. The study used the FGLS regression to test the variables relationships and to test the moderating effects of internal auditor on the corporate governance characteristics and corporate performance. The obtained empirical results supported a significant positive relationship between non-executive board, audit committee size, audit committee independence and internal audit profession, and corporate performance. Negative significant findings were also observed between the board size, internal audit size and internal audit education, and corporate performance. As for the moderating effects, the results supported a significant moderating role of internal audit size on the size of the board and its relationship with corporate performance. This study extends past studies dedicated to testing the agency theory and resource dependence theory as underpinning theories in examining the relationship between corporate governance and corporate performance. The study is expected to contribute to conceptual and theoretical studies by highlighting issues concerning corporate governance practice in Saudi listed firms. The study focused on the internal audit committee characteristics, corporate governance characteristics and the corporate governance best practices that practitioners can utilized when it comes to the role of internal audit committee.</p>

Gender Diversity, Political Connections and Environmental, Social and Governance Performance in China: The Moderating Role of Tenure

2021 ◽  
Vol 39 (10) ◽  
Author(s):  
Zhang Xiaomei ◽  
Mohd Rashdan Sallehuddin ◽  
Rosli Mohd Saad ◽  
Zhou Lu
Keyword(s):  
Corporate Governance ◽  
Gender Diversity ◽  
Fixed Effect ◽  
Political Connections ◽  
Political Connection ◽  
Cross Sectional ◽  
Variable Approach ◽  
The Impact ◽  
Moderating Role

This study focuses on the two corporate governance variables of gender diversity and political connections and their effects on Environmental, Social and Governance (ESG) Performance in China with the moderating role of tenure.  To examine these effects, this study uses a hierarchical regression analysis to check the effects of a firm's corporate governance on ESG performance.  This analysis is based on a sample of 143 listed firms that have ESG scores in China over the four years 2015–2018. In specifically, the fixed-effect regression with Driscoll-Kraay (1998) standard errors is used to correct heteroskedasticity-autocorrelation and cross-sectional correlation. Moreover, this study considered the time fixed effect and utilized the instrumental variable approach to control the model's endogeneity. The empirical results from this analysis show that gender diversity and political connection can significantly and positively affect ESG performance.  As example of moderating results, Chairman’s tenure inhibits the effects of gender diversity and the political connection on ESG performance. To our knowledge, this study examines for the first time the moderating role of chairman's tenure in the impact of corporate governance on the ESG performance in the context of a weaker regulatory environment. This study's results provide a guide for investors and policymakers to make decisions about investment and ESG policy.

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