scholarly journals Board structure and corporate R&D intensity: evidence from Forbes global 2000

2020 ◽  
Vol 28 (3) ◽  
pp. 445-463 ◽  
Author(s):  
Aws AlHares ◽  
Ahmed A. Elamer ◽  
Ibrahem Alshbili ◽  
Maha W. Moustafa
Keyword(s):  
Risk Taking ◽  
National Level ◽  
Oecd Countries ◽  
Least Square ◽  
Future Research ◽  
Board Structure ◽  
Accounting Systems ◽  
Content Type ◽  
Anglo American ◽  
The Impact

Purpose This study aims to examine the impact of board structure on risk-taking measured by research and development (R&D) intensity in OECD countries. Design/methodology/approach The study uses a panel data of 200 companies on Forbes global 2000 over the 2010-2014 period. It uses the ordinary least square multiple regression analysis techniques to examine the hypotheses. Findings The results show that the frequency of board meetings and board size are significantly and negatively related to risk-taking measured by R&D intensity, with a greater significance among Anglo-American countries than among Continental European countries. The rationale for this is that the legal and accounting systems in the Anglo American countries have greater protection through greater emphasis on compliance and disclosure, and therefore, allowing for less risk-taking. Research limitations/implications Future research could investigate risk-taking using different arrangements, conducting face-to-face meetings with the firm’s directors and shareholders. Practical implications The results suggest that better-governed firms at the firm- or national-level have a high expectancy of less risk-taking. These results offer regulators a resilient incentive to pursue corporate governance (CG) and disclosure reforms officially and mutually with national-level governance. Thus, these results show the monitoring and legitimacy benefits of governance, resulting in less risk-taking. Finally, the findings offer investors the opportunity to build specific expectations about risk-taking behaviour in terms of R&D intensity in OECD countries. Originality/value This study extends and contributes to the extant CG literature, by offering new evidence on the effect of board structure on risk-taking. The findings will help policymakers in different countries in estimating the sufficiency of the available CG reforms to prevent management mishandle and disgrace.

Corporate governance mechanisms and R&D intensity in OECD courtiers

2020 ◽  
Vol 20 (5) ◽  
pp. 863-885
Author(s):  
Aws AlHares
Keyword(s):  
Corporate Governance ◽  
Risk Taking ◽  
Oecd Countries ◽  
Least Square ◽  
European Countries ◽  
Board Structure ◽  
Governance Mechanisms ◽  
Content Type ◽  
Anglo American ◽  
The Impact

Purpose This study aims to investigate the impact of ownership structure and board structure on risk-taking as measured by research and development (R&D) Intensity in OECD countries. Design/methodology/approach A panel data of 300 companies from Anglo American and European countries between 2010 and 2016 were used. The ordinary least square multiple regression analysis procedure is used to examine the relationships. The findings are robust to alternative measures and endogeneities. Findings The results show that institutional ownership, board size, independent directors and board diversity are negatively related to risk-taking, with greater significance among Anglo American countries than among Continental European countries. In contrast, the results show that director ownership is statistically insignificant. Originality/value This study extends and contributes to the extant corporate governance (CG) literature, by offering new evidence on the effect of ownership and board structure on risk-taking between two different traditions. The findings will help regulators and policy-makers in the OECD countries in evaluating the adequacy of the current CG reforms to prevent management misconduct and scandals. These findings are relevant for companies aiming to adopt the most suitable governance mechanisms to pursue their R&D objectives and for policymakers interested in promoting R&D investment.

Corporate risk taking and sustainability: a case of listed firms from USA and Germany

2019 ◽  
Vol 10 (1) ◽  
pp. 2-15 ◽  
Author(s):  
Zahid Irhsad Younas ◽  
Ameena Zafar
Keyword(s):  
Risk Taking ◽  
Profit Maximization ◽  
Well Being ◽  
Least Square ◽  
Board Structure ◽  
Best Interest ◽  
Content Type ◽  
Listed Firms ◽  
Corporate Risk ◽  
The Impact

PurposeThis study aims to analyze the impact of corporate risk taking on the sustainability of firms in USA and Germany. As risk taking is an expensive phenomenon, the firm may shift the resources from stakeholder well-being to profit maximization of shareholders. Ultimately, risk taking results in the reduction of firm’s sustainability.Design/methodology/approachTo capture the impact of corporate risk taking, the corporate-governance variables, i.e. “independent board structure” and “board size,” were used as instrumental variables to control excessive corporate risk taking and restrict it at a healthy level. A sample of 3,387 unbalanced panel observations from USA and Germany, for the period 2004-2015, were assessed.FindingsThe results confirm that corporate risk taking has a negative and significant impact on the sustainability of firms.Research limitations/implicationsGovernment and policymakers in USA and Germany may introduce regulations to curb excessive corporate risk taking for sustainable corporations and sustainable society. This research suggests that corporate risk taking is not in the best interest of stakeholders.Originality/valuePrevious literature only finds the impact of sustainability on corporate risk taking and there is not a single study that examines the impact of corporate risk taking on the sustainability of a firm. Thus, this study contributes to existing literature on corporate risk taking and sustainability. The study further contributes by using the instrumental variable two stage least square.

scholarly journals Block ownership and companies’ R&D intensity: The moderating effect of culture

2018 ◽  
Vol 15 ◽  
pp. 19-32 ◽  
Author(s):  
Aws AlHares ◽  
Collins Ntim ◽  
David King
Keyword(s):  
Least Squares ◽  
Risk Taking ◽  
Oecd Countries ◽  
Ordinary Least Squares ◽  
European Countries ◽  
Future Research ◽  
Least Squares Regression ◽  
Minority Shareholders ◽  
Anglo American ◽  
The Impact

This study seeks to examine the impact of Block Ownership structure on risk-taking as measured by R&D Intensity in OECD countries. The study uses a panel data of 200 companies from Anglo American and European countries between 2010 and 2014. The ordinary least squares regression is used to examine the relationships. Additionally, to alleviate the concern of potential endogeneity, we use fixed effect regression, two-stage least squares using instrumental variables. The results show that there is a negative and significant relationship between block ownership and risk-taking, with a greater significance among Continental European countries than among Anglo American countries. The rationale for this is that Continental European countries are more likely to have block owners who are also the co-founders and owners of their companies. Also, for the block owners in Anglo American companies, there is greater protection afforded minority shareholders because of the particular legal system in these countries. Future research could investigate risk-taking using other measures, performing interviews with firm’s management, investors and owners. This study extends, as well as contributes to the extant CG literature by offering new evidence on the effect of Block ownership on risk-taking between two different traditions. The findings will help regulators and policymakers in the OECD countries in evaluating the adequacy of the current CG reforms to prevent management misconduct and scandals.

scholarly journals Does ownership structure improve credit ratings?

2018 ◽  
Vol 7 (2) ◽  
pp. 22-33 ◽  
Author(s):  
Aws AlHares ◽  
Collins Ntim ◽  
David King ◽  
Ron Byrne
Keyword(s):  
Ownership Structure ◽  
Credit Rating ◽  
Credit Ratings ◽  
Oecd Countries ◽  
Least Square ◽  
European Countries ◽  
Future Research ◽  
Firm Level ◽  
Anglo American ◽  
The Impact

This study seeks to examine the impact of Block Ownership structure on Credit Ratings in OECD countries. This research seeks to contribute to the extant literature by exploring the effects of Corporate Governance (CG) mechanisms on corporate credit ratings. The study uses a panel data of 200 companies from Anglo American and European countries between 2010 and 2014. The ordinary least square regression is used to examine the relationships. Additionally, to alleviate the concern of potential endogeneity, we use fixed effect regression, two-stage least squares using instrumental variables. The results show there is a negative and significant relationship between block ownership and credit ratings, with a greater significance among Anglo American countries than among European countries. The rationale for this is that Anglo-American system gives preferential treatment to individual shareholders and its accounting tradition leads to a decline in risk and increase in credit ratings. The result is consistent with the multi-theoretical framework predictions derived from the agency and stewardship theories. Future research could investigate credit ratings using other credit rating agencies, selecting a larger sample that includes small, mid-size and large companies. This paper extends, as well as contributes to extant CG literature by offering new evidence on the effect of block ownership on credit ratings between two different traditions. This will be explored by employing firm-level CG mechanisms by accounting for control variables. The findings will help regulators and policymakers in OECD countries in evaluating the adequacy of current CG reforms to prevent management misconduct and scandals.

CEO incentive compensation and earnings management

2016 ◽  
Vol 54 (10) ◽  
pp. 2447-2461 ◽  
Author(s):  
Madi Almadi ◽  
Philip Lazic
Keyword(s):  
Corporate Governance ◽  
Earnings Management ◽  
Future Research ◽  
Content Type ◽  
Institutional Settings ◽  
Legal Enforcement ◽  
Anglo American ◽  
Corporate Governance Quality ◽  
The Uk ◽  
The Impact

Purpose The purpose of this paper is to investigate the impact of CEO incentive-based compensation on earnings management, taking into account the influence of institutional settings and corporate governance systems. Design/methodology/approach Using archival data of 3,000 British, Australian, German, and Austrian firm-years between 2005 and 2014, the study applies fixed-effect estimator to reduce risks of endogeneity bias. Findings The findings reveal that institutional factors influence the relationship between CEO incentive-based compensation and earnings management. Particularly, firms from countries within the Anglo-American model (the UK and Australia), which provide greater protection for investor, stricter legal enforcement, and higher quality of corporate governance, tend to have lower level of earnings management. However, besides corporate governance quality, it is relevant to consider weaker investor protection and legal enforcement to motivate earnings management in firms from countries within the Euro-Continental model (Germany and Austria). Originality/value The study suggests that robust implementation of corporate governance, derived from either model, helps in restraining CEO opportunistic behavior. Importantly, more qualified institutions have higher impact on the relative adequacy of CEO incentive-based pay formulas in mitigating earnings management concerns. This can be extended by future research through comparative studies using other contexts or influential institutions.

Understanding IFRS adoption

2019 ◽  
Vol 20 (4) ◽  
pp. 543-570 ◽  
Author(s):  
Olfa Riahi ◽  
Walid Khoufi
Keyword(s):  
Logistic Regression ◽  
Least Square ◽  
Future Research ◽  
Behavioral Factors ◽  
Content Type ◽  
Ordinary Least Square ◽  
Ifrs Adoption ◽  
Starting Point ◽  
Behavioral Attribute ◽  
The Impact

Purpose The purpose of this paper is to discern the impact of main behavioral factors that could affect the decision of adopting IFRS in developing countries (DCs). In other words, this work looks to identify the different variables that are likely to influence the adoption of IFRS in these countries. Design/methodology/approach The methodological orientation of this research is to highlight and analyze the correlation between the cited factors and the IFRS adoption in DCs. Tested models are functions of logistic regression. To assess the parameters of these functions, the commonly used method is not that of ordinary least square but the maximum likelihood technique. In short, this study followed a hypothetical-deductive methodology by referring to the application of a logistic regression for each of the variables presumed to be analyzed. The authors implement this empirical model by using the neo-institutional approach and basing on a sample of 108 DCs. Findings The empirical results show that there exists a bidirectional causal relationship between the majority of the developed behavioral variables and the decision of whether adopting or unadopting IFRS by DCs. They also indicate through multivariate analysis that the selection of IFRS by DCs is primarily legitimized by institutional and social pressures (institutional isomorphism). Research limitations/implications It is essential to indicate that some limits might be assigned to the study. They are attached principally to the use of a dichotomous dependent variable which presents a restriction in a sense where the robust inequality at the level of the numbers of the countries of sub-samples can relatively weaken the findings. There are also few studies that jointly analyze the behavioral dimensions within a country and the adoption of IFRS. Institutional theory emanated from the research has proved useful in escaping this limit. Practical implications These empirical insights are of particular interest to local accounting standard setters of the selected countries since they can provide a better discernment of factors that can encourage the adoption of IFRS. Indeed, the research can be a reference for governments to better identify the economic, political and institutional obstacles that have an impact on behaviors which could compel countries to flee the adoption of IFRS. This paper will also be helpful for future research studying the links between human behavior and accounting in a general way. It should be noted that the results will be significant for future studies looking for real behavioral factors that drive a country to adopt an accounting framework. The studies will be able to use the empirical variables as a starting point and then they can extract new measures to identify the impact of behavior on decisions to adopt any standards. Originality/value At the present study, the authors strive to provide input to the literature by focusing on the determinants of the choice of an accounting practice in a DC reverberating to a new dimension which is the behavioral attribute.

scholarly journals Impact of IoT on social innovation in Japan

2019 ◽  
Vol 13 (3) ◽  
pp. 341-353 ◽  
Author(s):  
Temitayo Shenkoya ◽  
Cho Dae-Woo
Keyword(s):  
Social Innovation ◽  
Positive Impact ◽  
National Level ◽  
Geographical Location ◽  
Radical Change ◽  
Working Environment ◽  
Future Research ◽  
Content Type ◽  
Incremental Change ◽  
The Impact

Purpose Recently, the discussion on the impact of the Internet of Things (IoT) in theory and in practice is increasing. While some proponent envisage that the IoT will bring about positive radical change in the modern society, others argue that the IoT will introduce more disadvantages in the long run (mainly in terms of job losses) than advantages. The purpose of this paper is to arbitrate this controversy by examining the impact of IoT on the Japanese society. Design/methodology/approach While previous studies have largely been qualitative in nature, in this study, a quantitative approach was used. A multi-dimensional analysis was carried out and the statistical method known as the one-way analysis of variance was used to process the data obtained during this study. Findings The results show that indeed the IoT has a positive impact on the daily lives of the Japanese people, however the change it brings are mainly incremental change and not radical. Furthermore, rather than reducing job opportunities, it has created more opportunities and simplified operation processes. Research limitations/implications However, a limitation of this study is in its narrow scope. It is important to note that further studies on an international level or perhaps multi-national level is needed. Furthermore, there may be other underlining factors, such as culture, social, economic, geographical location, technology capacity, that may contribute to the impact of the IoT on daily life. Therefore, future research needs to verify if indeed this is the case. Originality/value This research successful arbitrates the argument about the impact of the IoT on the society by specifically showing that the advantages brought by the IoT out-ways its disadvantages. Furthermore, the uncertainty (fear of job losses) expressed by some experts was addressed in this study. The results obtained showed that the diffusion of the IoT has no correlation with job loss but rather supports improved working environment and creation of jobs.

Trust, personality, risk taking and entrepreneurship

2015 ◽  
Vol 11 (3) ◽  
pp. 191-209 ◽  
Author(s):  
Rachid Zeffane
Keyword(s):  
Gender Differences ◽  
United Arab Emirates ◽  
Risk Taking ◽  
Important Variable ◽  
Entrepreneurial Intentions ◽  
Future Research ◽  
Nascent Entrepreneurs ◽  
Content Type ◽  
Business Courses ◽  
The Impact

Purpose – The purpose of this paper is to examine the impact of trust, personality and risk taking on entrepreneurial intentions (EIs). In this perspective, it explores gender differences among nascent and actual entrepreneurs in the context of the United Arab Emirates (UAE). Design/methodology/approach – Survey data were collected from two sets of populations: 370 students attending business courses in a university in the UAE (as proxies to nascent entrepreneurs) and 324 small business owners/operators (as proxies to actual entrepreneurs). The scales used in the study were borrowed from previous research and were also empirically confirmed through reliability tests. Findings – In support of previous research, analyses of variance confirmed the hypotheses that females are less inclined to become entrepreneurs and are less likely to take risk. Females were also found to be less trusting than males. Regression analysis revealed that, the intention to engage in entrepreneurship is most significantly affected by the propensity to trust. These confirm the study hypotheses. Research limitations/implications – This study is set in a single country and as such, its findings may be constrained by cultural/national specificities. Future research could consider examining the variables of this study (particularly gender differences and their relevance to the effects of trust and risk taking on EIs) in a wider cross-national context. Practical implications – The findings of this study clearly indicate that trust is an important variable that can be cultivated at the pre-entrepreneurial stage so that future entrepreneurs (females in particular) are appropriately equipped and geared to cope with risk in entrepreneurship activities. Originality/value – Research on gender, trust, risk taking and entrepreneurial behaviors in the UAE/Middle East context remains lacking. Also, studies using samples of both actual and nascent entrepreneurs remain lacking. This study fills these gaps and also provides a platform for further understanding the importance of gender differences in relation to trust, personality, risk taking and EIs.

Remittances and households’ savings behaviour in Bangladesh

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Sarah Salahuddin ◽  
Muhammad Mehedi Masud ◽  
Kwek Kian Teng
Keyword(s):  
Regression Analysis ◽  
National Level ◽  
Least Square ◽  
Pension Scheme ◽  
Analysis Method ◽  
Content Type ◽  
Ordinary Least Square ◽  
Least Square Regression ◽  
Ordinary Least Square Regression ◽  
The Impact

Purpose The purpose of this study is to examine the impact of remittance inflow on households’ savings behaviour in Bangladesh. Remittances are considered as the countercyclical flow of income for its recipient economies. It surges the liquidity of the households receiving remittances, allows them to endure local economic shocks and facilitates them to practice productive activities. Remittances often form a big pool of resources for investment which complement the national savings and support the country’s growth through higher rates of capital accumulation. Therefore, if a significant portion of the remittance is used for savings it can lead to prominent economic growth in the long term. Design/methodology/approach Existing literature indicates remittance-receiving households have a greater propensity to use remittance income to meet basic consumption. However, based on the survey conducted by the Bangladesh Bureau of Statistics on remittances and household savings (SIR, 2016) and using the ordinary least square regression analysis method, to identify the connection between remittances and household’s saving (SIR, 2016) and using the ordinary least square regression analysis method, to identify the connection between remittances and household’s savings behaviour in Bangladesh. Findings The findings of this study represent remittances encourage households to pursue different kinds of savings in Bangladesh. Savings are made in the form of opening savings accounts, deposit pension scheme/fixed deposits/Bonds, insurance policies, also savings through non-governmental organizations, cooperative societies and savings at home. Other than remittances the demographic characteristics of the household head also influence the savings choices. Originality/value To enable the implementation of appropriate policies to boost savings, analysis from both perspectives; the household and the national level, requires strong vigilance and surveillance.

Does collectivism necessarily negate the spirit of entrepreneurship?

2014 ◽  
Vol 20 (3) ◽  
pp. 278-296 ◽  
Author(s):  
Rachid Zeffane
Keyword(s):  
Middle East ◽  
United Arab Emirates ◽  
Explanatory Power ◽  
National Level ◽  
Future Research ◽  
Strong Impact ◽  
Gulf Region ◽  
Personal Traits ◽  
Content Type ◽  
The Impact

Purpose – The purpose of this paper is to explore the relationships between individualism/collectivism (as personal traits) and individuals’ potential to become an entrepreneur. Design/methodology/approach – The study draws on a sample of 503 students enrolled in business courses at a university in the United Arab Emirates (UAE). It focusses on the concept of Entrepreneurial Potential (EP) as a measure of “desirability and inclination” to start a business. The paper tests the hypothesis that the concepts of individualism and collectivism are not necessarily polar ends of the same continuum and examine their impacts on EP, controlling for age and gender as main demographic characteristics. Four main hypotheses are explored. Findings – Statistical analysis confirms the two main hypotheses. They reveal that: first, concomitant with the dominant collectivist values at national level, potential future entrepreneurs evolving in the Middle East/Gulf region endorse personal traits of a predominantly collectivist nature; second, contrary to popular assumptions individualism does not have a strong impact on youth EP. In the context of this study, the impact of collectivism on EP is most significant. The paper also found that gender had no significant impact on EP Research limitations/implications – The use of personality traits alone, as a basis for understanding predictors of EP may not be sufficient. A number of contextual variables (such the socio-cultural and economic context) may also have a strong influence. Unfortunately, it is not possible to test for these effects with the data available in this study. Future research may consider these. Practical implications – Despite its limited scope (limited sample-size and target population), the findings of this study are useful to both practitioners and policy makers. Management practitioners interested in entrepreneurial behaviors need to take stock of the fact that future entrepreneurs can (and perhaps should be able to) blend their competitive entrepreneurial drive with the spirit of collectivism. This is particularly relevant in selection processes using personality tests for the purpose of extracting the most likely candidates for entrepreneurial ventures involving youth. Originality/value – The findings of this study do not support the general assumption that individualism and entrepreneurship ties necessarily go hand in hand. They clearly indicate that collectivism has more explanatory power in this regard, though this may be contextual. These findings may be explained by the context of the study (UAE/Middle East). The overwhelming majority of the respondents are from the Middle East and gulf region, where collectivist aspirations are predominant. Yet, the economies of countries in those regions are fuelled by an increasing number of advanced and quite daring entrepreneurial projects, as exemplified by the modernist business ventures in Dubai, Qatar, and Abu Dhabi.

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