scholarly journals Voluntary appointment of independent directors: evidence from Taiwan

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Mao-Feng Kao ◽  
Lynn Hodgkinson ◽  
Aziz Jaafar
Keyword(s):  
Corporate Governance ◽  
Least Squares ◽  
Research Work ◽  
Ordinary Least Squares ◽  
Independent Directors ◽  
Parameter Estimates ◽  
Two Stage ◽  
Data Set ◽  
Content Type ◽  
Two Stage Least Squares

Purpose Using a data set of Taiwanese listed firms from 2002 to 2015, this paper aims to examine the determinants to voluntarily appoint independent directors. Design/methodology/approach This study uses panel estimation to exploit both the cross-section and time-series nature of the data. Further, this paper uses Tobit regression, generalized linear model (GLM) in the additional analysis and the two-stage least squares to mitigate for a possible endogeneity issue. Findings The main findings show that Taiwanese firms with large board sizes tend to voluntarily appoint independent directors and firms that already have independent supervisors more willingly to accept additional independent directors onto the board. Furthermore, ownership concentration and institutional ownership are positively associated with the voluntary appointment of independent directors. On the contrary, firms controlled by family members are generally reluctant to voluntarily appoint independent directors. Research limitations/implications The findings are important for managers, shareholders, creditors and policymakers. In particular, when considering the determinants of the voluntary appointment of independent directors, the results indicate that independent supervisors, outside shareholders and institutional investors are significant factors in influencing effective internal and external corporate governance mechanisms. This research work focuses on the voluntary appointment of independent directors. It would be interesting to compare the effectiveness of voluntary appointments with a mandatory appointment within Taiwan and with other jurisdictions. Originality/value This study incrementally contributes to the corporate governance literature in several ways. First, this study extends the earlier research by using a more comprehensive data set of non-financial Taiwanese firms and using alternative methodologies to investigate the determinants of voluntary appointment of independent directors. Second, prior studies tend to neglect the possible issue of using a censored and fractional dependent variable, the proportion of independent directors, which might yield biased and inconsistent parameter estimates when using ordinary least squares regression estimation. Finally, this study addresses the relevant econometric issues by using the Tobit, GLM and the two-stage least squares for a possible endogeneity concern.

scholarly journals The effects of referees on the final score in football

2018 ◽  
Vol 35 (70) ◽  
pp. 79-98
Author(s):  
Matías Fontenla ◽  
Germán M. Izón
Keyword(s):  
Least Squares ◽  
Ordinary Least Squares ◽  
Two Stage ◽  
Home Team ◽  
Final Score ◽  
Crowd Size ◽  
Two Stage Least Squares

This paper examines whether there exists favouritism by individual referees in favour of the home team in Argentina’s first division football (soccer) league. We study 936 matches between 2008 and 2010, and run both ordinary least squares (OLS) and two-stage least squares (2-SLS) specifications. Using goal differential between the home and away teams as the dependent variable, we find that individual referees have a statistically significant effect on the score of the game, even after controlling for referee actions such as yellow and red cards, penalties awarded, and other factors such as team quality, crowd size, and crowd composition. Crowd size and composition do not seem to affect the outcome of the game.

Female directors and the cost of debt: does gender diversity in the boardroom matter to lenders?

2019 ◽  
Vol 34 (4) ◽  
pp. 374-392 ◽  
Author(s):  
Muhammad Usman ◽  
Muhammad Umar Farooq ◽  
Junrui Zhang ◽  
Muhammad Abdul Majid Makki ◽  
Muhammad Kaleem Khan
Keyword(s):  
Least Squares ◽  
Gender Diversity ◽  
Ordinary Least Squares ◽  
Cost Of Debt ◽  
Least Squares Regression ◽  
Two Stage ◽  
Loan Default ◽  
Content Type ◽  
Female Directors ◽  
The Cost

Purpose This paper aims to investigate the question concerning whether gender diversity in the boardroom matters to lenders or not? Design/methodology/approach To answer this question, the authors use the data from 2009 to 2015 of all A-share listed companies on the Shanghai and Shenzhen stock exchanges. The authors use ordinary least squares regression and firm fixed effect regression to draw our inferences. To check and control the issue of endogeneity the authors use one-year lagged gender diversity regression, two-stage least squares regression, propensity score matching method and Heckman two-stage regression. Findings The results suggest that the presence of female directors on the board reduces managerial opportunistic behavior and information asymmetry and, consequently, creditors’ perceptions about the probability of loan default and the cost of debt. The authors find that lenders charge 4 per cent less from borrowers that have at least one female board member than they do from borrowers with no female board members. The authors also find that the board structure (i.e. gender diversity) of government-owned firms also matters to lenders, as government-owned firms that have gender-diverse boards have a lower cost of debt (i.e. 5 per cent lower interest rate). Practical Implications The findings have implications for individual borrowers and for regulators. For example, borrowers can get debt financing at lower rates by altering their boards’ composition (i.e. through gender diversity). From the regulatory perspective, the results support recent legislative initiatives around the world regarding female directors’ representation on boards. Originality Value This paper makes several contributions. First, beyond the recent studies on boardroom gender, the authors investigate the relationship between gender diversity in the boardroom and the cost of debt. Second, the authors extend the literature on the association between government ownership and cost of debt by first time providing evidence that the board composition (e.g. gender diversity) of government-owned firms also matters to the lenders. The other contributions are discussed in the introduction section.

Board characteristics, ownership concentration and firms’ performance

2019 ◽  
Vol 8 (2) ◽  
pp. 146-165 ◽  
Author(s):  
Abdul Waheed ◽  
Qaisar Ali Malik
Keyword(s):  
Corporate Governance ◽  
Financial Sector ◽  
Resource Dependence Theory ◽  
Ownership Concentration ◽  
Independent Directors ◽  
Data Set ◽  
Content Type ◽  
Listed Firms ◽  
Board Characteristics ◽  
Concentrated Ownership

Purpose The purpose of this paper is to extend the understanding and application of interactive ties creating value through board characteristics, ownership concentration and firms’ performance by using a contingent theoretical-based framework based on the amalgamation of resource dependence theory, stakeholder theory, agency theory, stewardship theory and institutional theory in a country with weak political environment. Design/methodology/approach This study includes a sample of an unbalanced panel of 309 non-financial sector firms listed on Pakistan Stock Exchange (PSX) from 2005 to 2016. In order to address the issue of unobserved heterogeneity, simultaneous and dynamic endogeneity, the current study employed the technique Arellano–Bond dynamic panel data estimation under assumptions of GMM (Arellano–Bond, 1991). Findings The empirical results suggest that the presence of concentrated ownership moderates and helps to overcome the agency problems through different governance mechanisms (such as board size, independent directors and CEO duality). The larger boards are found to be beneficial whereas the higher representation of independent directors in the board is found to be detrimental for Pakistani firms. Research limitations/implications Limitations of the study are, first the current study has analyzed public-listed firms from the non-financial sector, and second the study has only focused on the financial aspect of the performance. The future research could include other proxies of corporate governance and ownership structure such as board diversity and meetings, audit committee and managerial ownership, etc. Practical implications The research also helps Pakistani policy makers in numerous ways. First, the current study confirms the monitoring and expropriation effect of ownership concentration in corporate governance and performance mechanism. Thus, the Security and Exchange Commission of Pakistan (SECP) should make such policies which protect the corporate board against the influence of concentrated ownership so that the interests of the minority shareholders are protected. Second, SECP should ensure that all the listed firms declare a comprehensive profile of their directors (such as academic qualification, age and experience) in their annual reports for the better understanding of the governance−performance mechanism. Originality/value The current study augments the emerging body of literature on corporate governance and firm performance mechanism through the amalgamation and testing of existing theories in an emerging economy like Pakistan by using wider and newer data set.

Organized labor, corporate governance, and stock price crash risk

2017 ◽  
Vol 16 (4) ◽  
pp. 424-443 ◽  
Author(s):  
Qunfeng Liao ◽  
Bo Ouyang
Keyword(s):  
Corporate Governance ◽  
Least Squares ◽  
Labor Unions ◽  
Stock Price ◽  
Negative Impact ◽  
Labor Union ◽  
Ordinary Least Squares ◽  
Crash Risk ◽  
Content Type ◽  
Managerial Opportunism

Purpose The aim of the paper is to investigate the effect of labor strength on stock price crash risk and related moderating mechanisms. Design/methodology/approach To examine the relationship between labor unions and stock price crash risk and, more importantly, whether corporate governance moderates this relationship. Ordinary least squares (OLS), two-stage least squares, cross-sectional analyses, industry-level regressions and firm-level regressions are conducted. Findings The results suggest a negative impact of labor union strength on stock price crash risk. Further analysis suggests strong corporate governance mechanisms may mitigate the increased stock price crash risk in less-unionized firms. Originality/value Labor unions have a long-term horizon in the firm and have strong incentives to monitor managerial opportunism. However, labor unions may also increase financial reporting opacity and collude with managers to gain bargaining power in labor negotiations. The authors’ finding suggests that labor union strength is negatively associated with stock price crash risk. This finding is consistent with the notion that labor unions curb managerial opportunism in information disclosure, resulting in reduced crash risk. More importantly, the authors find corporate governance mitigates the negative impact of reduced unionization on crash risk, providing empirical support for recent regulatory efforts to strengthen corporate governance to prevent stock market crash.

Continuous disclosure and information asymmetry

2015 ◽  
Vol 28 (2) ◽  
pp. 195-224 ◽  
Author(s):  
Mark Russell
Keyword(s):  
Information Asymmetry ◽  
Least Squares ◽  
Design Methodology ◽  
Ordinary Least Squares ◽  
Bad News ◽  
Least Squares Regression ◽  
Two Stage ◽  
Ordinary Least Squares Regression ◽  
Content Type ◽  
High Information

Purpose – This paper aims to examine whether firms with high information asymmetry disclose more information under a continuous disclosure regime, and, second, the paper examines whether continuous disclosures reduce information asymmetry. Design/methodology/approach – The study models relations between continuous disclosures and information asymmetry using ordinary least squares regression and two-stage least squares regression. Findings – The study finds firms with high information asymmetry disclose more information. Further, the study finds that disclosure in the presence of high information asymmetry increases asymmetry. Finally, while bad news increases information asymmetry, the disclosure of firm-specific good and bad news is associated with reduced information asymmetry. Originality/value – The paper identifies conditions under which Continuous Disclosure Regime increases information in markets and influences information asymmetry.

scholarly journals MODEL NON REKURSIF DALAM ANALISIS JALUR

2020 ◽  
Vol 9 (1) ◽  
pp. 8
Author(s):  
DINIE ANEFI HAJARA ◽  
IZZATI RAHMI HG ◽  
FERRA YANUAR
Keyword(s):  
Least Squares ◽  
Ordinary Least Squares ◽  
Two Stage ◽  
Two Stage Least Squares

Analisis jalur adalah suatu teknik penggambaran dan pengujian model hubungan antar variabel yang berbentuk sebab akibat, yang dikembangkan dari analisis regresi sebagai metode untuk mempelajari pengaruh langsung atau tidak langsung dari variabel bebas terhadap variabel terikat. Jika ditinjau dari hubungan peubahnya, analisis jalur terbagi menjadi model rekursif dimana hubungan sebab akibat bergerak satu arah dan model non rekursif dimana hubungan sebab akibat bergerak dua arah atau timbal balik. Untuk menduga koefisien jalur model rekursif bisa digunakan metode Ordinary Least Squares (OLS), namun untuk model non rekursif penggunaan metode OLS tidak layak digunakan karena akan menghasilkan koefisien yang bias dan inkonsisten. Oleh karena itu, untuk menduga koefisien model non rekursif digunakan metode pendugaan lain salah satunya Two-Stage Least Squares (2SLS), yang merupakan pengembangan dari metode OLS. Pada penelitian ini untuk menduga koefisien model non rekursif digunakan metode jalur dan metode 2SLS dengan menggunakan data bangkitan. Hasil yang diperoleh dengan kedua metode ini tidak jauh berbeda, sehingga metode 2SLS menjadi metode alternatif untuk menduga koefisien jalur model non rekursif.Kata Kunci: Analisis jalur, model non rekursif, Two-Stage Least Squares (2SLS)

scholarly journals A Comparison of Two-Stage Least Squares (TSLS) and Ordinary Least Squares (OLS) in Estimating the Structural Relationship between After-School Exercise and Academic Performance

Mathematics ◽  
2021 ◽  
Vol 9 (23) ◽  
pp. 3105
Author(s):  
Kyulee Shin ◽  
Sukkyung You ◽  
Mihye Kim
Keyword(s):  
Academic Performance ◽  
Least Squares ◽  
Least Squares Method ◽  
Ordinary Least Squares ◽  
Structural Relationship ◽  
After School ◽  
Full Model ◽  
Two Stage ◽  
Two Stage Least Squares ◽  
Exam Scores

The current study examines the structural relationship between the academic performance exam scores of Korean middle school students and their after-school exercise hours. Although prior literature theoretically or experimentally predicts that these variables are positively associated, this association is difficult to empirically verify without controlling for mutual effects with other variables, or unless a full model is estimated by specifying the whole structure of all variables affecting the two variables in question. Unlike previous studies, this study estimates the structural relationship using two-stage least squares method, which does not require experimental observations collected for our particular purpose or estimating the full model. From this estimation, we empirically affirm that there is a positive structural relationship between students’ after-school exercise hours and their academic performance exam scores, whereas the ordinary least squares method consistently estimates a negative relationship.

scholarly journals Ownership structure, board of directors and firm performance: evidence from Taiwan

2019 ◽  
Vol 19 (1) ◽  
pp. 189-216 ◽  
Author(s):  
Mao-Feng Kao ◽  
Lynn Hodgkinson ◽  
Aziz Jaafar
Keyword(s):  
Corporate Governance ◽  
Firm Performance ◽  
Board Of Directors ◽  
Ownership Structure ◽  
Firm Value ◽  
Listed Companies ◽  
Independent Directors ◽  
Data Set ◽  
Content Type ◽  
Listed Firms

PurposeUsing a data set of listed firms domiciled in Taiwan, this paper aims to empirically assess the effects of ownership structure and board of directors on firm value.Design/methodology/approachUsing a sample of Taiwanese listed firms from 1997 to 2015, this study uses a panel estimation to exploit both the cross-section and time–series nature of the data. Furthermore, two stage least squares (2SLS) regression model is used as robustness test to mitigate the endogeneity issue.FindingsThe main results show that the higher the proportion of independent directors, the smaller the board size, together with a two-tier board system and no chief executive officer duality, the stronger the firm’s performance. With respect to ownership structure, block-holders’ ownership, institutional ownership, foreign ownership and family ownership are all positively related to firm value.Research limitations/implicationsAlthough the Taiwanese corporate governance reform concerning the independent director system which is mandatory only for newly-listed companies is successful, the regulatory authority should require all listed companies to appoint independent directors to further enhance the Taiwanese corporate governance.Originality/valueFirst, unlike most of the previous literature on Western developed countries, this study examines the effects of corporate governance mechanisms on firm performance in a newly industrialised country, Taiwan. Second, while a number of studies used a single indicator of firm performance, this study examines both accounting-based and market-based firm performance. Third, this study addresses the endogeneity issue between corporate governance factors and firm performance by using 2SLS estimation, and details the econometric tests for justifying the appropriateness of using 2SLS estimation.

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