Corporate disclosure and foreign share ownership: empirical evidence from African countries

2015 ◽  
Vol 57 (5) ◽  
pp. 417-444
Author(s):  
Godfred A. Bokpin ◽  
Zangina Isshaq ◽  
Eunice Stella Nyarko
Keyword(s):  
Financial Reporting ◽  
Corporate Disclosure ◽  
Statistical Relation ◽  
African Countries ◽  
Content Type ◽  
Listed Firms ◽  
Share Ownership ◽  
Using Data ◽  
The Impact ◽  
Corporate Disclosures

Purpose – The study aims to seeks to ascertain the impact of corporate disclosure on foreign equity ownership. Corporate disclosures are important to for stock markets because it is an activity that mitigates information differences between company insiders and outsiders. Design/methodology/approach – Corporate disclosures assume an even greater important when company outsiders are not domiciled in the same country as the company and the company insiders. In this study, the relation between foreign share ownership and corporate disclosures using data on Ghana, Kenya and Nigeria is examined. Findings – The consistent results in this study are that foreign share ownership is positively related to firm size. A negative relation, however, between foreign share ownership and corporate disclosure is found, but this turns out to be related to disclosures about ownership, while disclosures on financial reporting and board management have a positive and insignificant statistical relation taking into account unobserved country, time and firm effects. Further analysis shows that corporate disclosures are very persistent and negatively related to lag foreign share ownership. No consistent statistical relation is found between disclosure and market-to-book values as a proxy for investment opportunities. It is recommended to African-listed firms to pursue adoption of high-quality financial reporting standards and to increase their reporting on board management. The study also recommends that the African Government weighs the benefits of detailed ownership disclosures. Originality/value – The study utilises frontier market data to complement existing literature on how corporate disclosure and transparency influences foreign investors decision to invest in Africa.

scholarly journals The extent of compliance with FRS 101 standard: Malaysian evidence

2017 ◽  
Vol 18 (1) ◽  
pp. 87-115 ◽  
Author(s):  
Azhar Abdul Rahman ◽  
Mohd Diah Hamdan
Keyword(s):  
Corporate Governance ◽  
Financial Reporting ◽  
Audit Committee ◽  
Content Type ◽  
Corporate Compliance ◽  
Financial Reporting Standards ◽  
Compliance Level ◽  
Using Data ◽  
Analysis Models ◽  
The Impact

Purpose The purpose of this paper is to investigate Malaysian companies’ compliance with mandatory accounting standards. Specifically, this study examines the efficacy of agency-related mechanisms on the degree of compliance with Financial Reporting Standards (FRS) 101, Presentation of Financial Statements. It so proceeds by focussing on corporate governance parameters (board characteristics and ownership structure) and other firm characteristics. Design/methodology/approach Using data drawn from a sample of 105 Malaysian companies listed on the ACE market in 2009, the authors employ multiple regression analysis models to establish whether selected corporate governance and company-specific characteristics (proxying for agency-related mechanisms) are related to the degree of disclosure compliance. Findings The results indicate that the overall disclosure compliance is high (92.5 per cent). Furthermore, only firm size is positively associated with the degree of compliance. The other variables, those consisting of board independence, audit committee independence, CEO duality, the extent of outside blockholders’ ownership and leverage, do not show any significant relationship with the degree of compliance. Research limitations/implications This study focusses on only one accounting standard (FRS 101) that is mandatory in Malaysia. FRS 101 is both structured and rigid, leaving no room for companies to conceal any particular information. The sample of Malaysian companies selected is restricted to those listed only on the ACE market. As such, the results cannot be generalised to every company in Malaysia. Practical implications These results have important implications for policy makers because they suggest that whilst agency-related mechanisms may motivate compliance with mandatory standards, full compliance may be unattainable without regulations. Originality/value This is the only study in Malaysia to investigate the impact of regulatory requirements on corporate compliance level by companies listed on the new ACE market, which was introduced by the Bursa Malaysia in August 2009. This study contributes to the literature by examining the effects of both company-specific characteristics (such as company size, company age, liquidity, etc.) and corporate governance parameters on the degree of corporate compliance with mandatory disclosure, simultaneously, in contrast with prior studies which have examined them in isolation.

IFRS adoption and accounting conservatism in Latin America

2020 ◽  
Vol 33 (3/4) ◽  
pp. 301-320
Author(s):  
Harold Lopez ◽  
Mauricio Jara ◽  
Adriana Cabello
Keyword(s):  
Latin America ◽  
Latin American ◽  
Financial Reporting ◽  
Accounting Conservatism ◽  
Content Type ◽  
Listed Firms ◽  
Financial Reporting Standards ◽  
Ifrs Adoption ◽  
Mandatory Adoption ◽  
The Impact

Purpose The purpose of this paper is to analyze the impact of IFRS mandatory adoption on accounting conservatism and to shed light on the drivers of such impact. Design/methodology/approach Using a sample of listed firms for five Latin American countries, the authors analyze the relation between mandatory adoption of International Financial Reporting Standards and the conditional accounting conservatism of earnings. Findings The authors find evidence that IFRS adoption boosts earnings conservatism. This result is robust and heterogeneous. The results also show that the effect of IFRS differs across firms and countries. Specifically, the impact of IFRS adoption is higher for low-earnings-quality firms and for firms with high levels of investment opportunities. Practical implications The results suggest that IFRS adoption in Latin America has enhanced comparability of financial information both across and within countries. Originality/value This paper contributes to the literature by providing new evidence on the drivers of the impacts of IFRS adoption in emerging markets.

Impact of IFRS: evidence from Spanish listed companies

2014 ◽  
Vol 22 (2) ◽  
pp. 157-172 ◽  
Author(s):  
Mariano González ◽  
Juan M. Nave ◽  
David Toscano
Keyword(s):  
Panel Data ◽  
Financial Reporting ◽  
Structural Breaks ◽  
Balance Sheet ◽  
Generalized Least Squares ◽  
Listed Companies ◽  
Content Type ◽  
Data Framework ◽  
Using Data ◽  
The Impact

Purpose – In this paper, the authors aim to analyze the impact of International Financial Reporting Standards' (IFRS) mandatory adoption on the financial statements of Spanish listed companies. Design/methodology/approach – The authors estimate a panel data model by generalized least squares' within-between in order to contrast the possible structural breaks in the relations between income statement items and balance sheet items, using data from the 35 largest listed companies. Findings – The results show significant changes on these relations, but with different signs and degrees of intensity depending on the balance sheet item analyzed. Research limitations/implications – The data choice introduces a size bias that could be taken into account in the generalization of the results to other listed companies. Originality/value – This work is developed using a mandatory, local, accounting and panel data framework for first time using Spanish listed companies in order to measure the impact of the IFRS adoption.

scholarly journals The impact of flexible corporate governance disclosures on value relevance. Empirical evidence from South Africa

2018 ◽  
Vol 18 (3) ◽  
pp. 369-385 ◽  
Author(s):  
Jonty Tshipa ◽  
Leon Brummer ◽  
Hendrik Wolmarans ◽  
Elda Du Toit
Keyword(s):  
South Africa ◽  
Corporate Governance ◽  
Financial Crisis ◽  
South African ◽  
Financial Reporting ◽  
Value Relevance ◽  
Content Type ◽  
Listed Firms ◽  
Asset Value ◽  
The Impact

PurposeConsidering that the Johannesburg Stock Exchange (JSE) has enacted in its Listings Requirements, compliance of listed firms to International Financial Reporting Standards (IFRS) and King Code of Good Corporate Governance, this study aims to investigate the impact of internal corporate governance attributes on the value relevance of accounting information in South Africa.Design/methodology/approachThe fixed effect generalised least squares regression is used for the period from 2002 to 2014. Proxies for internal corporate governance are the size of the board, leadership structure, board activity, staggered board, boardroom independence, presence of key committees and board gender diversity. Value relevance is measured using the adjustedR2derived from a regression of stock price on earnings and equity book values by following Ohlson’s accounting-based valuation framework.FindingsThe findings suggest that the net asset value per share is value-relevant in South African listed firms and also when the boardroom is largely independent. The value of earnings per share (EPS) is more robust when corporate governance structures, such as separating the roles of chief executive officer and chairperson, proportion of board-independent board members and presence of board committees, are in place. This suggests that EPS favours agency and resource dependence theories.Practical implicationsThe value relevance of accounting information in the South African financial market underscores the importance of requisite rules and supervision regarding financial reporting to allow asset owners and managers in the allocation of capital decisions. This study supports the view that corporate governance plays a key role in ensuring, amongst others, credible financial reporting. The outcome of this study could inform the JSE to enforce, even stricter, compliance with IFRS and corporate governance to improve the value relevance of financial information.Social implicationsSignificant corporate governance reforms around the world suggest that regulators and policy makers consider corporate governance as a pertinent tonic in ensuring, amongst others, credible financial reporting. The implications of the study might assure users of financial information of how compliance to corporate governance practices may influence the value of the firm. This paper provides empirical evidence in the South African context that EPS, unlike net asset value per share, is driven by corporate governance structures.Originality/valueThe period of this study is unique, because it covers a relatively stable economic period before the financial crisis, a challenging and unstable period of time when the financial crisis materialised, and the aftermath of the financial crisis. In addition, the examination period of the study also covers the two corporate governance reforms in South Africa, King II in 2002 and King III in 2009, as well as the new Companies Act No. 71 of 2008. These exogenous factors may influence the results.

The relationship between corporate governance, corruption and forward-looking information disclosure: a comparative study

2017 ◽  
Vol 17 (2) ◽  
pp. 284-304 ◽  
Author(s):  
Ben Kwame Agyei-Mensah
Keyword(s):  
Corporate Governance ◽  
Descriptive Analysis ◽  
Sub Saharan Africa ◽  
African Countries ◽  
Content Type ◽  
Listed Firms ◽  
Sub Saharan ◽  
The Impact ◽  
The Relationship ◽  
Forward Looking

Purpose This paper aims to examine the relationship between corporate governance, corruption and disclosure of forward-looking information in listed firms in two African countries, Botswana and Ghana. Design/methodology/approach The study uses 174 firm-year observations between the period of 2011-2013 for listed firms in the two countries. Each annual report was individually examined and coded to obtain the disclosure of forward-looking information index. Descriptive analysis was performed to provide the background statistics of the variables examined. This was followed by regression analysis which forms the main data analysis. Findings The findings show that firms in the least corrupt country, Botswana, disclose more forward-looking information than firms in Ghana, one of the most corrupt countries in sub-Saharan Africa. This confirms the relationship between the transparency level of a country and the transparency level of the listed firms in that country. Originality/value This is one of the few studies in sub-Saharan Africa that considered the impact of corporate governance factors on transparency and disclosure of forward-looking information. This study contributes to the literature on the relationship between corporate governance and disclosure by showing that disclosure of forward-looking information in Ghana is associated with the proportion of independent board members. The disclosure of forward-looking information in Botswana on the other hand is influenced by board ownership concentration. The findings of this study will help market regulators in Ghana, Botswana and sub-Saharan Africa, Security and Exchange Commission (SEC) and the Sub-Sahara African Exchanges in evaluating the adequacy of the current disclosure regulations in their countries.

The impact of intellectual capital on firm performance: a study of Indian firms listed in COSPI

2018 ◽  
Vol 19 (5) ◽  
pp. 935-964 ◽  
Author(s):  
Neha Smriti ◽  
Niladri Das
Keyword(s):  
Firm Performance ◽  
Intellectual Capital ◽  
Value Creation ◽  
Generalized Method Of Moments ◽  
Value Added ◽  
Secondary Data ◽  
Share Price ◽  
Content Type ◽  
Listed Firms ◽  
The Impact

Purpose The purpose of this paper is to examine the effect of intellectual capital (IC) on financial performance (FP) for Indian companies listed on the Centre for Monitoring Indian Economy Overall Share Price Index (COSPI). Design/methodology/approach Hypotheses were developed according to theories and literature review. Secondary data were collected from Indian companies listed on the COSPI between 2001 and 2016, and the value-added intellectual coefficient (VAIC) of Pulic (2000) was used to measure IC and its components. A dynamic system generalized method of moments (SGMM) estimator was employed to identify the variables that significantly contribute to firm performance. Findings Indian listed firms appear to be performing well and efficiently utilizing their IC. Overall, human capital had a major impact on firm productivity during the study period. Furthermore, the empirical analysis showed that structural capital efficiency and capital employed efficiency were equally important contributors to firm’s sales growth and market value. The growing importance of the contribution of IC to value creation was consistently reflected in the FP of these Indian companies. Practical implications This study has robust theoretical grounds and employs a validated methodology. The present study extends knowledge of IC among academicians and managers and highlights its contribution to value creation. The findings may help stakeholders and policymakers in developing countries properly reallocate intellectual resources. Originality/value This study is the first study to evaluate IC and its relationship with traditional measures of firm performance among Indian listed firms using dynamic SGMM and VAIC models.

Evolution of top management’s understanding of product quality in Eastern Europe since the end of communism

2017 ◽  
Vol 29 (1) ◽  
pp. 82-100
Author(s):  
Svetoslav Georgiev ◽  
Emil Georgiev
Keyword(s):  
Eastern Europe ◽  
Product Quality ◽  
Quantitative Research ◽  
Business Performance ◽  
Research Approach ◽  
Senior Managers ◽  
Content Type ◽  
Doing Business ◽  
Using Data ◽  
The Impact

Purpose The purpose of this paper is to analyse the evolution of top management’s understanding of product quality in Bulgaria since the end of communism. The study examines three specific areas: top management’s understanding of the term “quality”; top management’s understanding of the relationship between quality and business performance; and top management’s understanding of the impact of job position on quality. Design/methodology/approach The paper relies on a quantitative research approach by using data from a survey of 186 companies in Bulgaria. Findings The paper suggests that senior managers in Bulgaria continue to base their understanding of “quality” on a single approach (*a characteristic of the communist era), with the product-based and the user-based approaches currently being the two most common ones. At the same time, surprisingly enough, this study claims that senior management in Bulgaria is currently well aware of the importance of quality as a dimension of firm’s competitiveness, and is also highly conscious of its roles’ impact on product quality. Research limitations/implications The results of this study are exclusively based on the case of Bulgaria and must be treated with caution in the case of other former communist states from the Central and Eastern Europe (CEE) region. Practical implications This paper has relevance for both managers and companies doing business in Eastern Europe. Originality/value This is the first paper to provide detailed analysis of the evolution of the understanding of “product quality” in CEE since the end of communism. Moreover, this paper applies, for the first time, Garvin’s five approaches to defining quality within a practical context.

Ownership as a determinant of chairperson activity: a study of Nordic listed companies

2015 ◽  
Vol 7 (4) ◽  
pp. 412-428
Author(s):  
Tor Brunzell ◽  
Jarkko Peltomäki
Keyword(s):  
Working Hours ◽  
Chief Executive ◽  
Ownership Concentration ◽  
Content Type ◽  
Listed Firms ◽  
Concentrated Ownership ◽  
The Board Of Directors ◽  
The Impact ◽  
The Empirical Analysis ◽  
A Company

Purpose – The purpose of this study is to explicitly focus on the roles of ownership concentration, ownership by the board, the chief executive officer (CEO) and the chairperson in the involvement and capabilities of chairpersons and other governors in their work. Design/methodology/approach – In this study, the authors investigate the impact of the concentration of ownership, the ownership of the board, the CEO and the chairperson on the chairperson’s activity when the roles of the chairperson and the CEO are separated The empirical analysis of this study is based on a survey sent to Nordic listed firms. Findings – The results show that the ownership characteristics of a company are important in determining the chairperson’s working hours, the chairperson’s communication with the CEO and the performance of governance activity. In addition, the authors found that while the ownership of the chairperson and the board of directors and ownership concentration improve governance activity, CEO ownership may undermine governance activity. Research limitations/implications – The primary implication of the study is that both ownership by internal governors and ownership concentration play an important role in determining the involvement of internal corporate governors. Originality/value – The study provides unique evidence that ownership by the chairperson, concentrated ownership and ownership by the board can potentially mitigate the costs of separating the roles of the chairperson and the CEO.

The impact of board composition and ownership structure on dividend payout policy: evidence from Saudi Arabia

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Helmi A. Boshnak
Keyword(s):  
Saudi Arabia ◽  
Ownership Structure ◽  
Dividend Policy ◽  
Payout Policy ◽  
Board Composition ◽  
Dividend Payout ◽  
Content Type ◽  
Listed Firms ◽  
Propensity To Pay ◽  
The Impact

PurposeThis study examines the impact of board composition and ownership structure variables on dividend payout policy in Saudi Arabian firms. In particular, it aims to determine the effect of board size, independence and meeting frequency, in addition to chief executive officer (CEO) duality, and state, institutional, managerial, family, and foreign ownership on both the propensity to pay dividends and dividend per share for Saudi-listed firms over the period 2016–2019.Design/methodology/approachThe paper captures dividend policy with two measures, propensity to pay dividends and dividend per share, and employs a range of regression methods (logistic, probit, ordinary least squares (OLS) and random effects regressions) along with a two-stage least squares (2SLS) model for robustness to account for heteroscedasticity, serial correlation and endogeneity issues. The data set is a large panel of 280 Saudi-listed firms over the period 2016 to 2019.FindingsThe results underline the importance of board composition and the ownership structure in explaining variations in dividend policy across Saudi firms. More specifically, there is a positive relationship between the propensity to pay dividends and board-meeting frequency, institutional ownership, firm profitability and firm age, while the degree of board independence, firm size and leverage exhibit a negative relation. Further, dividend per share is positively related to board meeting frequency, institutional ownership, foreign ownership, firm profitability and age, while it is negatively related to CEO duality, managerial ownership, and firm leverage. There is no evidence that family ownership exerts an impact on dividend payout policy in Saudi firms. The findings of this study support agency, signalling, substitute and outcome theories of dividend policy.Research limitations/implicationsThis study offers an important insight into the board characteristic and ownership structure drivers of dividend policy in the context of an emerging market. Moreover, the study has important implications for firms, managers, investors, policymakers, and regulators in Saudi Arabia.Originality/valueThis paper contributes to the existing literature by providing evidence on four board and five ownership characteristic drivers of dividend policy in Saudi Arabia as an emerging stock market, thereby improving on less comprehensive previous studies. The study recommends that investors consider board composition and ownership structure characteristics of firms as key drivers of dividend policy when making stock investment decisions to inform them about the propensity of investee firms to pay dividends and maintain a given dividend policy.

Are atheist consumers less ethical? Investigating the role of religiosity and atheism on consumer ethics

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Denni Arli ◽  
Tuyet-Mai Nguyen ◽  
Phong Tuan Nham
Keyword(s):  
Consumer Ethics ◽  
Intrinsic Religiosity ◽  
Content Type ◽  
Ethical Behaviors ◽  
Segmentation Analysis ◽  
Study Results ◽  
Unethical Behaviors ◽  
The Usa ◽  
Using Data ◽  
The Impact

Purpose There is a perception that non-religious consumers are less ethical than religious consumers. Studies found prejudices against atheists around the world and assumed that those who committed unethical behavior were more likely to be atheists. Hence, first, the purpose of this study is to investigate the effect of consumers’ intrinsic religiosity, extrinsic religiosity and atheism on consumers’ ethical beliefs. Second, this study attempts to segment consumers and identify differences between these segments. Design/methodology/approach Using data from 235 study participants in the USA and 531 in Vietnam. Subsequently, a two-step cluster approach was used to identify segments within these samples. Findings The study results show consumers’ intrinsic religiosity negatively influences all consumers’ unethical beliefs. Similarly, atheism also negatively influences all consumers’ unethical beliefs. This study also complements other studies exploring consumer ethics in developing countries. In addition, the segmentation analysis produced unique segments. The results from both samples (USA and Vietnam) indicated that non-religious consumers are less likely to accept various unethical behaviors compared to religious consumers. Religious consumers are not necessarily more ethical and atheism consumers are not necessarily less ethical. In the end, are implications for business ethics, religious and non-religious leaders on how to view the impact of beliefs on consumer ethical behaviors. Originality/value This is one of the first few studies investigating the impact of atheism on consumer ethics. The results of this study further extend the knowledge of study in consumer ethics by comparing consumers’ religiosity and atheism.

Sign in / Sign up

Export Citation Format

Share Document