The agency cost of ownership and governance adaptations in farm producer organizations

2019 ◽  
Vol 80 (2) ◽  
pp. 200-211
Author(s):  
Jasper Grashuis
Keyword(s):  
Price Volatility ◽  
Agency Cost ◽  
Empirical Literature ◽  
Performance Measurements ◽  
Board Size ◽  
Content Type ◽  
Impact Performance ◽  
The Usa ◽  
Survey Responses ◽  
And Control

Purpose Many farm producer organizations pursue growth and complexity in response to price volatility, industry consolidation and other external developments. Consequently, as ownership is dispersed and control is delegated, members may face increasing agency cost. In spite of the potential to impact performance and even survival, empirical attention to agency problems in farm producer organizations is limited. The purpose of this paper is to address the gap in the literature with an empirical study. Design/methodology/approach With survey responses from 365 farm producer organizations in the USA, the author uses a two-limit tobit model to estimate the relationships of six ownership and governance characteristics (i.e. board size, management size, director independence, manager independence, CEO independence and non-member ownership) to agency cost, which is proxied by the operating expense ratio. Findings While controlling for heterogeneity in scale and technology, the author finds positive relationships of board size, management size and CEO independence to agency cost. The novel result illustrates there is a significant cost to the adoption of non-traditional ownership and governance characteristics by farm producer organizations. Practical implications The presence of agency cost serves as motivation to farm producer organizations to implement new or adapt old agency mechanisms. One recommendation is to reconsider the payment structure of non-member CEOs. There may not be enough incentive to inspire an upstream bias, which is perhaps possible by linking CEO performance to price, patronage and member-oriented performance measurements. Originality/value Agency cost is rarely studied in relation to farm producer organizations. Recent contributions in the empirical literature lacked an explicit connection of ownership and governance characteristics to agency cost.

Corporate governance mechanisms and agency costs: cross-country analysis

2016 ◽  
Vol 16 (2) ◽  
pp. 347-360 ◽  
Author(s):  
Tatiana Garanina ◽  
Elina Kaikova
Keyword(s):  
Corporate Governance ◽  
Agency Costs ◽  
Gender Diversity ◽  
Agency Cost ◽  
Negative Influence ◽  
Empirical Literature ◽  
Governance Mechanisms ◽  
Content Type ◽  
Corporate Governance Mechanisms ◽  
The Usa

Purpose The purpose of this paper is to investigate whether specific corporate governance mechanisms, such as board size, board composition, leverage and firm size, tend to mitigate agency cost occurrence in the USA, Russia and Norway. Design/methodology/approach The authors analyze the sample of 243 US, 196 Russian and 175 Norwegian joint stock companies for the period 2004-2012. The regression analysis is applied to test the models. Findings It is revealed that larger boards increase agency costs (measured by asset utilization ratio and asset liquidity ratio) in all sample companies. The proportion of female members has a very slight positive effect in US companies, a negative influence on agency costs in the Norwegian sample and is not significant in the Russian market. The authors find that the big Russian and US companies in the samples of this paper have lower agency costs. Practical implications The results of this paper show which agency-mitigation mechanisms work more effectively in companies operating in the analyzed countries characterized by specific corporate governance models. Originality/value The main contribution of this paper to the empirical literature is that it extends the stream of agency research by introducing new, emerging markets: represented by Scandinavian (depicted by the Norwegian sample) and Russian companies. Considering that each market – US, Norwegian and Russian – represents significant distinguishing features in their institutional framework, the paper provides an important research setting in which corporate governance mechanisms can be analyzed from the perspective of a country’s peculiar characteristics. Unlike other agency cost studies, this paper accounts for the gender diversity component in the companies and contributes to gender diversity issues.

scholarly journals Developing sustainable societies – a dialogical network perspective

2015 ◽  
Vol 42 (6) ◽  
pp. 583-596 ◽  
Author(s):  
Are S. Ingulfsvann ◽  
Ove Jakobsen ◽  
Øystein Nystad
Keyword(s):  
Factor Analysis ◽  
Modern Society ◽  
Business Organizations ◽  
Society Business ◽  
Content Type ◽  
Northern Norway ◽  
The Usa ◽  
Planning Processes ◽  
Sustainable Societies ◽  
And Control

Purpose – The purpose of this paper is to describe and discuss how and to what extent creative dialogue processes can have an impact on regional political planning processes in Norway. Politicians at Nordland County invited representatives from six different regions in Nordland to participate in café dialogues. Design/methodology/approach – The empirical material is collected from café-dialogues in Northern Norway in which representatives from civil society, business organizations, local government, and NGOs participated. The data processing is based on triangulation of hermeneutic interpretation, frequencies, and factor analysis. Findings – The findings indicate that most people want a “greener” future; this can be described as sustainable societies based on ecological production, distribution, consumption, and redistribution. People take on a more radical position in their ideas about the future than most politicians. The factor analysis grouped the participants into the following categories; “Ecological economics”, “Small is beautiful”, “Entrepreneurs”, and “Growth and control”. A large number of the participants are categorized either as “Circulation economics” or “Small is beautiful”. Practical implications – To solve the challenges of modern society politicians can instigate more radical solutions than they are in the habit of doing. The participants in the café dialogues describe fundamental changes in order to attain viable local societies per 2030. Originality/value – In this paper the authors demonstrate that cultural creatives in the USA give a relevant context for interpreting attitudes to change in small societies in Northern Norway.

Examining the influence of transculturation on work ethic in the United States

2015 ◽  
Vol 22 (1) ◽  
pp. 145-162 ◽  
Author(s):  
Dwight M. Hite ◽  
Joshua J. Daspit ◽  
Xueni Dong
Keyword(s):  
Ethnic Groups ◽  
Work Ethic ◽  
Ethnically Diverse ◽  
The United States ◽  
Convenience Sample ◽  
Content Type ◽  
Significant Difference ◽  
The Usa ◽  
Generational Groups ◽  
Survey Responses

Purpose – The purpose of this paper is to explore the influence of cultural assimilation – termed “transculturation” – on work ethic perceptions, thus this study examines trends in work ethic across ethnic and generational groups within the USA. Design/methodology/approach – Following a literature review on work ethic, ethnicity, and transculturation, an analysis of variance based on 873 survey responses is presented. The sample includes undergraduate and graduate students at several public universities within the USA. Findings – An empirical analysis supports the hypothesis that the variation of work ethic perceptions within the Millennial generation is significantly less than the variation among older generations. The authors find no significant difference in general work ethic perceptions among Millennial ethnic groups. Research limitations/implications – While the study is conducted using a convenience sample, the demographics are closely representative of the USA labor force. The results suggest that Millennials, while a more diverse ethnic population, exhibit less variation among work ethic perceptions than earlier generational groups. Practical implications – Understanding differences in work ethic perceptions across various ethnic groups is valuable for managers interested in designing jobs that appropriately exploit the full value of a multi-generational workforce. Originality/value – The findings of this study offer new insights into how more recent generations, while more ethnically diverse, exhibit a convergence in perceptions of work ethic.

Returns and volume

2020 ◽  
Vol 37 (3) ◽  
pp. 457-473
Author(s):  
Panos Fousekis
Keyword(s):  
Trading Volume ◽  
Time Series Data ◽  
Price Volatility ◽  
Statistical Testing ◽  
Model Specification ◽  
Series Data ◽  
Causal Order ◽  
Content Type ◽  
Daily Data ◽  
The Usa

Purpose The relationship between returns and trading volume is central in financial economics because it has both a theoretical interest and important practical implications with regard to the structure of financial markets and the level of speculation activity. The aim of this study is to provide new insights into the association between returns and trading volume by investigating their kernel (instantaneous) causality. The empirical analysis relies on time series data from 22 commodities futures markets (agricultural, energy and metals) in the USA. Design/methodology/approach Non-parametric (local linear) regressions are applied to daily data on returns and on trading activity; generalized correlation measures are computed and their differences are subjected to formal statistical testing. Findings The results suggest that raw returns are likely to kernel-cause volume and volume is likely to kernel-cause price volatility. The patterns of causal order are generally in line with what is stipulated by the relevant theory, they provide guidance for model specification and they appear to explain the empirical evidence on temporal (lag-lead) causality between the same pairs of variables obtained in earlier works. Originality/value The concept of kernel causality has very recently become a part of the toolkit for econometric/statistical analysis. To the best of the author’s knowledge, this is the first study that relies on the notion of kernel (instantaneous) causality to provide new evidence on a relationship that is of keen interest to investors, professional economists and policymakers.

Monotonicity, linearity and symmetry in the price volatility–volume relationship

2020 ◽  
Vol 37 (1) ◽  
pp. 110-133 ◽  
Author(s):  
Panos Fousekis ◽  
Dimitra Tzaferi
Keyword(s):  
Trading Volume ◽  
Futures Markets ◽  
Statistical Tests ◽  
Price Volatility ◽  
Local Linear Regression ◽  
Linear Regression Models ◽  
Content Type ◽  
Nonparametric Approach ◽  
Volume Relationship ◽  
The Usa

Purpose This paper aims to investigate the contemporaneous link between price volatility and trading volume in the futures markets of energy. Design/methodology/approach Non-parametric (local linear) regression models and formal statistical tests are used to assess monotonicity, linearity and symmetry. The data are daily price and volumes from five futures markets (West Texas Intermediate, Brent, gasoline, heating oil and natural gas) in the USA. Findings Trading volume and price volatility have, in all markets, a strong nonlinear relation to each other. There are violations of monotonicity locally but not globally. The qualitative nature of the price shocks may have implications for the trading activity locally. Originality/value To the authors’ best knowledge, this is the first manuscript that investigates simultaneously and formally all the three important issues (i.e. monotonicity, linearity and asymmetry) for the price volatility–volume relationship using a highly flexible nonparametric approach.

Purchasing power parity as a long-term memory process

2015 ◽  
Vol 10 (4) ◽  
pp. 711-725 ◽  
Author(s):  
Mohamed Bilel Triki ◽  
Samir Maktouf
Keyword(s):  
Exchange Rate ◽  
Purchasing Power Parity ◽  
Empirical Literature ◽  
Long Term Memory ◽  
Purchasing Power ◽  
Power Parity ◽  
Fractional Cointegration ◽  
Content Type ◽  
Long Run ◽  
The Usa

Purpose – The purpose of this paper is to focus on whether the deviations from the cointegrating relationship possess long memory and the fractional cointegration analyses may capture a wider range of mean-reversion behaviour than standard cointegration analyses. Design/methodology/approach – This paper uses a fractional cointegration technique to test the purchasing power parity (PPP). Findings – The authors found that PPP held, but very weakly, in the long run between the Argentine, Brazil, Chile, Colombia, Indonesia, Korea, Mexico, Thailand and Venezuela and US exchange rate during our floating exchange rate period but that the deviations from it did not follow a stationary process. Nevertheless, it is also found that the deviations from PPP exists and can be characterized by a fractionally integrated process in nine out of 13 countries studied. Originality/value – The findings are consistent with the consensus of the empirical literature, reviewed earlier in this paper, on PPP between Argentine, Brazil, Chile, Colombia, Indonesia, Korea, Mexico, Thailand and Venezuela and the USA.

Board structure: an empirical study of firms in Anglo-American governance environments

2014 ◽  
Vol 40 (7) ◽  
pp. 681-699 ◽  
Author(s):  
M.I. Muller-Kahle ◽  
Liu Wang ◽  
Jun Wu
Keyword(s):  
Firm Value ◽  
Resource Dependence ◽  
Resource Dependence Theory ◽  
Board Independence ◽  
Board Structure ◽  
Board Size ◽  
Content Type ◽  
The Usa ◽  
The Uk ◽  
The Impact

Purpose – With boards of directors playing both monitoring and guidance roles, the purpose of this paper is to examine the impact of board structure on firm value in large US and UK firms using the lenses of agency and resource dependence theories. Design/methodology/approach – Using a sample of firms in the USA and the UK from 2000 to 2007, the paper conducts a panel data analysis of the impact of board structure on firm value and examine the nuances of different governance environments. Findings – The paper finds distinct differences in the impact of board independence, board size, and outside director busyness on firm value between UK and US firms. Specifically, the paper finds that board independence, board size, and board busyness all have a significant positive impact on firm value in the UK. However, the paper finds no significant relationship between board independence and firm value among US firms. Both board size and board busyness are found to be positively associated with firm value in the USA. Social implications – The paper finds strong support for resource dependence theory in the UK but limited support for agency theory in the USA. Originality/value – This paper takes a multi-country approach to examining the impact of board structure on firm value.

Cautiousness on convergence of accounting standards across countries

2016 ◽  
Vol 21 (2) ◽  
pp. 246-267 ◽  
Author(s):  
Silvia Angeloni
Keyword(s):  
Financial Reporting ◽  
Accounting Standards ◽  
Empirical Literature ◽  
Corporate Disclosure ◽  
Content Type ◽  
Generally Accepted Accounting Principles ◽  
Financial Reporting Standards ◽  
Financial Communication ◽  
Convergence Process ◽  
The Usa

Purpose – The purpose of this paper is to provide an updated picture of the convergence process between International Financial Reporting Standards (IFRS) and United States Generally Accepted Accounting Principles (US GAAP), with IFRS clearly emerging as a global financial reporting benchmark. This study is aimed at evaluating the main benefits but also some significant issues arising from the adoption of a single set of accounting standards. Design/methodology/approach – The main examples of theoretical and empirical literature for and against IFRS implementation are reviewed. Findings – Since markets became increasingly global, the comparability of financial statements is required to enable better corporate communication and transparency to the advantage of all stakeholders. The main difficulties of IFRS adoption by the USA are explored. Practical implications – The study’s implications are to emphasize the practical obstacles to resolving the issues of financial communication through a uniform set of standards, by highlighting the importance of taking into account other dynamics in improving the corporate disclosure domestically and globally. Originality/value – The key contribution of this study is to reflect on the best ways to reach global communication without sacrificing the effectiveness and affordability of financial reporting.

Subordinates’ perceptions of supervisor paternalism: a scale development

2015 ◽  
Vol 30 (6) ◽  
pp. 659-674 ◽  
Author(s):  
María Fernanda Wagstaff ◽  
Adrienne Collela ◽  
María del Carmen Triana ◽  
Alexis Nicole Smith ◽  
Marla Baskerville Watkins
Keyword(s):  
Scale Development ◽  
Social Dominance ◽  
Discriminant Validity ◽  
Demographic Variables ◽  
Future Research ◽  
Validity And Reliability ◽  
Content Type ◽  
Convergent And Discriminant Validity ◽  
The Usa ◽  
And Control

Purpose – Drawing from social dominance theories and conceptualizations of paternalism, the purpose of this paper is to define and develop a measure of subordinates’ perceptions of supervisor paternalism (SPSP). Design/methodology/approach – The authors assess the validity of the measure using Hinkin’s (1998) scale development steps. Findings – The authors found evidence of the convergent and discriminant validity of the measure of subordinates’ perceptions of supervisor paternalism drawing from three different samples. Participants in the study were also able to differentiate a low from a high paternalism condition using the measure of paternalism. Finally, as expected, the interaction between a supervisor’s benevolence and control was significantly associated with subordinates’ perceptions of supervisor paternalism. Research limitations/implications – The authors provide evidence for the validity of a measure of subordinates’ perceptions of supervisor paternalism while controlling for various status signals represented by demographic variables. Results may have been influenced by common method variance. However, there is no theoretical reason to expect any such interactions. Additionally, as the authors limited the data collection to the USA, the authors caution against generalizing beyond that context. Practical implications – The authors provide validity and reliability evidence for a unidimensional measure that is short and easy to administer in future research to further examine the consequences of perceptions of supervisor paternalism. Social implications – Defining and measuring subordinates’ perceptions of supervisor paternalism is important to society given the potential adverse consequences of these perceptions. Because paternalistic relationships pervade many supervisor-subordinate interactions, both subordinates and supervisors can become more sensitive to the consequences of such interactions by understanding the conditions under which supervisor paternalism manifests itself. Originality/value – Conceptually, in this study, the authors build on prior research and define supervisor paternalism from a social dominance perspective. Empirically, the authors contribute a statistically valid and reliable unidimensional measure.

Access to bank loans while in bankruptcy: the role of single vs. multiple banking relations

2014 ◽  
Vol 40 (7) ◽  
pp. 724-733
Author(s):  
Anand Jha ◽  
Siddharth Shankar ◽  
Leonard Arvi
Keyword(s):  
Financial Distress ◽  
Design Methodology ◽  
Bank Loans ◽  
Empirical Literature ◽  
Data Set ◽  
Content Type ◽  
Banking Relationships ◽  
Banking Relationship ◽  
And Control

Purpose – The purpose of this paper is to use a unique hand-collected data set from India to investigate whether firms with multiple banking relationships that are in bankruptcy get additional loans more easily than those with a single banking relationship. The authors find that firms that have a single banking relationship increase their bank borrowing by 5 percent every year compared to those with multiple banking relationships. The results are in contrast to the hypothesis that firms choose to have multiple banking relationships to increase the probability of getting additional loans in cases of financial distress. The results are consistent with the hypothesis that a larger number of banks increases the coordination and bargaining costs during bankruptcy and decreases the liquidation value of the assets, and that the banks take that into consideration before making loans. Design/methodology/approach – Regression and control. Findings – The choice of single vs multiple banking relationships is a widely studied topic in the banking literature. A large strand of theoretical and empirical literature argues that multiple banking relationships make it easier for a firm to get additional loans in case of financial distress. The study shows that such may not be the case in instances where bargaining and co-ordination costs due to poor bankruptcy procedures are severe. Originality/value – The authors use a unique hand collected data set from India to investigate if it is easier to get additional loans in bankruptcy for firms with multiple banking relationships compared to those with a single banking relationship.

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