Listed public–private enterprises: stock market information, agency costs and productive efficiency outcomes

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Aidan Vining ◽  
Mark Moore ◽  
Claude Laurin
Keyword(s):  
Stock Exchange ◽  
State Ownership ◽  
Productive Efficiency ◽  
Policy Implications ◽  
Empirical Literature ◽  
Private Enterprises ◽  
Private Ownership ◽  
Content Type ◽  
And Performance ◽  
Ownership Patterns

PurposeThis paper addresses the social value of commercial enterprises that are jointly owned by a government and private sector investors and where the shares are listed on a stock exchange: thus, “listed public–private enterprises” (LPPEs). The theoretical part of the paper addresses how differences in ownership patterns influence the behavior and performance of LPPEs.Design/methodology/approachWe develop a conceptual taxonomy, drawing on the empirical evidence on the behavior and performance of public–private hybrid enterprises and on the application of agency theory to that evidence. The taxonomy discussion predicts how different ownership patterns affect enterprise productive efficiency and the ability of governments to achieve social goals through LPPEs. We review the empirical literature on government enterprise ownership and on the concentration of private share ownership to deduce how these matter for owner and managerial behavior and productive efficiency. We review the literature that considers the informational content that listing of an enterprise's shares on a stock exchange can provide to enterprise owners, managers and other domestic audiences with a policy interest. We employ a social welfare perspective to derive policy implications as to when the LPPE governance structure is most appropriate.FindingsWe show how the monitoring and performance weaknesses of state ownership are offset by some private ownership, particularly when combined with listing on a stock exchange. We demonstrate the effects of different governance structures on enterprise productive efficiency. We find that the LPPE structure is particularly appropriate as an alternative to nationalization or to full privatization and regulation of natural monopoly public utilities, and as an alternative to full private ownership and taxation of non-renewable natural resource extractive enterprises.Originality/valueThis paper explicitly addresses the question of why and how the combination of government ownership, private investor ownership and listing on an exchange is socially valuable in providing information on productive efficiency to governments.

Adapting Altman's model to predict the performance of the Palestinian industrial sector

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Bahaa Awwad ◽  
Bahaa Razia
Keyword(s):  
Stock Exchange ◽  
Statistical Significance ◽  
Multiple Linear Regression Model ◽  
Industrial Sector ◽  
Main Hypothesis ◽  
Content Type ◽  
Independent Variables ◽  
Industrial Companies ◽  
And Performance ◽  
The Relationship

PurposeThis study aims to adopt the Altman model in order to predict the performance of industrial companies listed on the Palestinian Stock Exchange during the period of time between 2013 and 2017.Design/methodology/approachThe study sample consisted of 12 industrial companies listed on the Palestine Stock Exchange, and their financial disclosure period extended for 5 years. Multiple linear regression model was used in the analysis to determine the relationship between the independent variables and the dependent variable where the independent variables were (X1, X2, X3). This study is based on one basic assumption, which is that the Altman's model cannot predict the performance of the Palestinian industrial sector.FindingsThe results of the analysis proved the negation of the zero main hypothesis. This means that Altman's model can predict the performance of the Palestinian industrial sector at the level of statistical significance (a = 0.05), as well as the existence of a statistically significant relationship between each of the independent variables (X2, X4, X5) and the dependent variable (Log (Z-score)). Hence, the relationship of X1 and X3 with the dependent variable was not statistically significant.Social implicationsThis paper highlights different challenges that face the adaption of Atman's model and performance prediction in the Palestinian industrial sector. The findings of the analysis have the potential to help future researchers in examining and dealing with new challenges.Originality/valueThis paper presents a vital review of adopting Altman's model in the Palestinian industrial sector. A number of recommendations have been made, the most important of which is that most of the companies are located in the red zone. The Altman's model must be adapted in order to fit the Palestinian environment according to the results of statistical analysis and according to a proposed model, which is Log (Z) = −0.653 + 0.72X2 + 0.18X4 + 0.585X5.

Regional and rural school consolidation: a scoping study of research literature

2019 ◽  
Vol 34 (3) ◽  
pp. 477-491
Author(s):  
Scott Eacott ◽  
Amanda Freeborn
Keyword(s):  
Evidence Base ◽  
Research Literature ◽  
School Consolidation ◽  
Policy Implications ◽  
Empirical Literature ◽  
Rural And Remote ◽  
Content Type ◽  
Scoping Study ◽  
Remote Locations ◽  
Robust Evidence

Purpose School consolidation reforms are underway in regional New South Wales (NSW), Australia. The purpose of this paper is to establish an evidence base of research literature on school consolidation in regional, rural and remote locations. Design/methodology/approach A scoping study of empirical literature on school consolidation, with a particular focus on regional, rural and remote education, since the year 2000 was undertaken. A corpus of 35 papers were identified and subjected to analysis based on: year of publication, country of origin, unit of analysis, data sources, timeframe and theoretical model. Findings There remains a limited evidence base for the success of school consolidation reforms for turning around student outcomes. In addition, a number of social implications are experienced by communities losing their local school. These issues are amplified in regional, rural and remote locations. Practical implications School consolidation reforms are used by governments/systems wanting to reduce costs and address issues of student disengagement and under-achievement. Despite a lengthy history internationally, there is at best mixed evidence regarding these reforms. With a consider disparity gap between urban and regional, rural and remote school outcomes, robust evidence on the success of reforms has major policy implications for government, systems, educators and communities. Originality/value With reforms already underway in NSW (and elsewhere), the need for a rigorous and robust evidence base, such as this scoping study, is timely and significant.

Audit-related attributes, regulatory reforms and timely disclosure

2017 ◽  
Vol 15 (2) ◽  
pp. 158-179 ◽  
Author(s):  
Khaled Samaha ◽  
Hichem Khlif
Keyword(s):  
Audit Committee ◽  
Stock Exchange ◽  
Emerging Market ◽  
Chief Executive ◽  
Policy Implications ◽  
Fiscal Year ◽  
Audit Report ◽  
Content Type ◽  
The Impact ◽  
Regulatory Reforms

Purpose This paper aims to examine the impact of audit-related attributes and regulatory reforms on timely disclosure as proxied by audit report lag (ARL) in an emerging market setting, namely, Egypt. Design/methodology/approach The paper used the balanced panel data of 372 firm-years observations of the most actively traded companies on the Egyptian Stock Exchange over the period from 2007 to 2010. The study measures the dependent variable of ARL as the number of days between the client’s fiscal year-end and the audit report. Findings Multivariate analysis indicates that audit committee activity (proxy for regulatory reforms) and external auditor type (proxy for audit-related attributes) contribute significantly to the reduction of ARL and increase disclosure timeliness. Furthermore, the paper found that ARL witnessed a slight decrease following the adoption of the new Egyptian Standards on Auditing (ESA). Finally, the paper’s findings show that industry types moderate the relationship between ARL and several audit-related variables and corporate governance attributes. Practical implications The results may have policy implications for both regulators and investors. For instance, policymakers in Egypt can enact new rules to reduce the Chief Executive Officer duality and establish the minimum required number of audit committee meetings to improve transparency level and, thus, increase disclosure timeliness. Besides, if future regulations aiming to increase disclosure timeliness are intended by Egyptian regulators, this paper’s findings suggest that this may have implications for the audit market because the Big Four audit firms will be more able to meet shorter audit delays. Originality/value The empirical evidence provided in this study further enhances the understanding of timely disclosure in Egypt which represents one of the leading emerging markets in the Middle East and North Africa region.

Investor perceptions of the benefits of political connections

2014 ◽  
Vol 10 (3) ◽  
pp. 312-331 ◽  
Author(s):  
Fan Yang ◽  
Craig Wilson ◽  
Zhenyu Wu
Keyword(s):  
Foreign Currency ◽  
State Ownership ◽  
Policy Implications ◽  
Political Connections ◽  
Short Sales ◽  
Government Ownership ◽  
Chinese Firms ◽  
Content Type ◽  
A Share

Purpose – The purpose of this paper is to investigate how foreign and domestic investors differ in their beliefs about the relative merits of a firm's political connections. Design/methodology/approach – These differences are employed to explain cross-sectional variation in the previously documented premium in A-share prices relative to otherwise equivalent foreign currency denominated B-shares for Chinese firms. Findings – Chinese domestic individual investors were excluded from owning B-shares of Chinese firms prior to February 20, 2001. The authors find that firms with more political connections have higher premiums and a smaller reduction in premiums associated with this event. Research limitations/implications – This is consistent with domestic block holders deriving additional benefits from politically connected firms. Practical implications – The findings also have important policy implications by showing that government can have a strong effect on the economy even without applying macro-policy tools. Social implications – Government ownership in listed companies can result in discrepancies among classes of investors with respect to their valuations. Furthermore, the prohibition of short sales prevents arbitrage from correcting this bias, and eventually the role of the market in allocating resources efficiently is undermined. Originality/value – The authors investigate the role of political connections as implied by the proportion of state ownership in explaining the A-share premium. Unlike previous studies that associate state ownership with political risk, the paper relates state ownership to political connections that are particularly beneficial to domestic large block shareholders. This interpretation is consistent with the findings and with previous literature on state ownership and political connections of Chinese firms.

Institutional environment, political connections of partial state ownership, and performance

2016 ◽  
Vol 43 (8) ◽  
pp. 856-870 ◽  
Author(s):  
Zengji Song ◽  
Abraham Nahm ◽  
Jun Yang
Keyword(s):  
Institutional Environment ◽  
State Ownership ◽  
Economic Consequences ◽  
Political Connections ◽  
Political Connection ◽  
Data Set ◽  
Content Type ◽  
Partial State ◽  
The Government ◽  
And Performance

Purpose – The purpose of this paper is to examine whether substantial differences in institutional environment in China lead to different levels of demand for political connection. Design/methodology/approach – Using a data set of 296 listed private sector enterprises (PSEs) in China, the authors empirically investigate the effects of institutional environmental factors upon political connection. Findings – The authors find that the lower the level of regional property right protection, the more powerful the government intervention, and the slower the economic development, the more motivated the PSEs were to build relationship with the government via partial state ownership. However, the degree of local corruption was not correlated with the demand for political connection. The authors also find that partial state ownership in PSEs exerted a positive effect on performance. Originality/value – Deviating from previous literature that has been mostly concerned about the economic consequences to firms caused by political connections, this paper examines the reasons for political connection among Chinese PSEs. The authors introduce a new dimension of political connection, namely, partial state ownership in PSEs.

Determinants of successful implementation of donor-funded projects in Uganda

2015 ◽  
Vol 42 (12) ◽  
pp. 1139-1154 ◽  
Author(s):  
Shafic Mujabi ◽  
Samson Omuudu Otengei ◽  
Francis Kasekende ◽  
Joseph Mpeera Ntayi
Keyword(s):  
Risk Management ◽  
Explanatory Power ◽  
Empirical Literature ◽  
Hierarchical Regression ◽  
Successful Implementation ◽  
Project Implementation ◽  
Content Type ◽  
Organizational Rationality ◽  
And Performance ◽  
The Relationship

Purpose – The purpose of this paper is to examine, empirically the relationship between organizational rationality, knowledge management (KM), risk management and successful implementation of donor-funded projects in Uganda. Design/methodology/approach – Data were obtained from 195 project managers of donor-funded projects both managed within government systems and those outside government using a questionnaire. Zero-order correlation analysis and hierarchical regression analysis were employed to analyze the data. Findings – The paper has two major findings: all the predictor variables are positively and significantly related to successful project implementation; and the relationship is strong enough to cause a 23 percent (R²) increase in the explanatory power in the presence of control variables. Research limitations/implications – The study focussed on selected donor-funded projects in Uganda and this limited the generalization of the findings. Moreover, there was also limited availability of local empirical literature with respect to implementation and performance of donor-funded projects. Practical implications – The results suggest that organizations that embrace organizational rationality, risk management and KM succeed in project implementation. Originality/value – There are many studies that investigate the practices adopted by organizations that implement donor-funded projects, however, this is the first study to the authors’ knowledge that examines the relationship between KM, rationality, risk management and successful implementation of donor-funded projects in Uganda.

Adoption of international accounting standards and performance of emerging capital markets

2016 ◽  
Vol 15 (2) ◽  
pp. 252-272 ◽  
Author(s):  
Karim Mhedhbi ◽  
Daniel Zeghal
Keyword(s):  
Capital Markets ◽  
Accounting Standards ◽  
Policy Implications ◽  
International Accounting ◽  
International Accounting Standards ◽  
Content Type ◽  
Before And After ◽  
Emerging Capital Markets ◽  
International Investors ◽  
And Performance

Purpose The purpose of this paper is to examine empirically the association between the adoption of international accounting standards (IAS/IFRS) and the performance of emerging capital markets. Design/methodology/approach Data related to 31 developing countries with capital markets were used. The authors performed univariate analyses (means comparison before and after the use of IAS/IFRS), as well as multivariate analyses (estimation of models of panel data), to test the hypothetical relations set up in the paper. Findings The results suggest that the performance of emerging capital markets is significantly and positively associated with IAS/IFRS use. They are consistent with several empirical investigations which highlighted the relevance of financial information under IAS/IFRS in emerging capital markets. Practical implications Several organizations and decision-makers including the IASB, governments, capital markets regulators and international investors should find the policy implications of this paper very meaningful. Originality/value To the best of the authors’ knowledge, the relationship between the use of IAS/IFRS and the performance of emerging capital markets based on a group of countries has not yet been explored.

scholarly journals The Influence of State Ownership on the Economic Performance of Korean Public Companies

2013 ◽  
Vol 28 (1) ◽  
pp. 1-16
Author(s):  
Park Jhung Soo ◽  
Hong Yu Hwa
Keyword(s):  
Political Influence ◽  
Agency Cost ◽  
State Ownership ◽  
Annual Data ◽  
Private Ownership ◽  
Government Ownership ◽  
Public Companies ◽  
Weak Support ◽  
Two Factors ◽  
And Performance

The property rights and agency cost theory of enterprises suggests that public ownership should perform less efficiently and profitably than private ownership. However, the existing empirical evidence provides weak support for this hypothesis. Numerous studies of Western capital markets and Chinese state enterprises have examined the relationship between ownership structure and performance. Agency theory suggests that when owners do not manage a firm themselves, a conflict of interest arises between the owners (principals) and managers (agents). Researchers have argued that government ownership is inferior to private ownership in competitive markets because it prioritizes social and political goals over value maximization, hiring decisions are often based on political influence rather than ability, and higher transaction costs are involved. This study investigated the influence of two factors, listing on the Korea Exchange and degree of state ownership, on performance using annual data for 51 companies in Korea for 1999-2009. We found that, on average, performance (measured by productivity, profitability, and efficiency) was positively influenced by public listing and negatively influenced by the degree of state ownership.

Investigating the associations between executive compensation and firm performance

2018 ◽  
Vol 19 (2) ◽  
pp. 245-270 ◽  
Author(s):  
Nader Elsayed ◽  
Hany Elbardan
Keyword(s):  
Firm Performance ◽  
Executive Compensation ◽  
Stock Exchange ◽  
Performance Pay ◽  
Simultaneous Equation ◽  
Future Research ◽  
Content Type ◽  
Executive Remuneration ◽  
Study Results ◽  
And Performance

PurposeWhile there have been extensive empirical investigations of pay-performance sensitivity, the perspective of performance-pay has received less attention to date. While executive compensation is sensitive to firm performance, firm performance is also likely to be affected by executive compensation. Adopting multiple theoretical perspectives, the purpose of this paper is to examine whether executive compensation has a greater influence on firm performance or whether the latter has a greater influence on compensation.Design/methodology/approachUsing data from a five-year period (2010-2014) for Financial Times and Stock Exchange 350 companies, the authors employ a set of simultaneous equation modelling to jointly investigate, after accounting for endogeneity problem, the mutual association of executive compensation and firm performance by employing four control variables (board size, non-executive directors, leverage and boardroom ownership).FindingsThe authors find strong evidence for the greater influence of executive compensation on firm performance than the pay-performance framework. This finding supports the tournament theory compared with the agency perspective.Research limitations/implicationsInevitably, there are limitations in a wide-ranging study of this nature that could be addressed in future research. As any empirical study utilising company data, there may be concerns to the effect of survivorship bias and the manner in which companies have reorganised, if there is any, themselves during the period under examination. There are also issues as to missing data, some measures relating to both executive compensation and corporate governance are not provided by the BoardEx database.Practical implicationsThe study results provide evidence that using the tournament perspective by remuneration committees as a guide for determining executive compensation helps in achieving better performance. This helps in developing appropriate mechanisms for setting executive remuneration.Originality/valueThis paper combines an empirical investigation of the frameworks of pay-performance and performance-pay and develops a system of six simultaneous equations to examine the associations between executive compensation and firm performance.

scholarly journals Health care investments and economic performance in Portugal: an industry level analysis

2019 ◽  
Vol 46 (6) ◽  
pp. 1174-1200 ◽  
Author(s):  
Alfredo M. Pereira ◽  
Rui M. Pereira ◽  
Pedro G. Rodrigues
Keyword(s):  
Health Care ◽  
Economic Performance ◽  
Spillover Effects ◽  
Professional Services ◽  
Policy Implications ◽  
Empirical Literature ◽  
Content Type ◽  
Net Exports ◽  
Capital Spending

Purpose The purpose of this paper, on Portugal, is to determine the economic effects of public and private capital spending on health. Design/methodology/approach The authors use a vector autoregressive model to estimate the elasticities and marginal products of health care investments in Portugal on investment, employment and output. Findings Every €1m invested in health care yields significant positive spillover effects, boosting investment and GDP by €24.74 and €20.45m, respectively, creating 188 net jobs. Adversely, net exports deteriorate, as new capital goods are imported. While only 28.2 percent of the total accumulated increase in GDP occurs within a year, investment is front loaded with a corresponding 73.8 percent. Over this period, 68 workers are displaced for every €1m invested. At a disaggregated level, real estate, construction, and transportation and storage are industries where output shares increase the most. Employment shares increase the most in professional services, construction and basic metals. Research limitations/implications This paper adds to the empirical literature, corroborating, for example, Rivera and Currais (1999a) and McDonald and Roberts (2002) in that health care spending can have a very significant effect on macroeconomic aggregates. In addition to the analysis of the tradable/non-tradable divide, it adds two further novelties by discussing industry-specific effects on economic performance and the distinction between effects on impact and those over the longer term. Practical implications As policy implications, health investments have very significant long-term economic performance effects, but are unhelpful counter cyclically. Also, they will change the industry mix: construction and professional services are the non-traded industries that will benefit the most, while the traded industries of non-metallic minerals, basic metals, and machinery and equipment benefit much less. Social implications Given that capital spending on health boosts economic performance, especially in the long run, it ought to be a part of Portugal’s medium-to-long-term growth strategy. Also, if these projects depress economic activity in the short run, and are thus unhelpful counter cyclically, the timing of when they are launched matters. Furthermore, following a health investment, policies that boost net exports will be required to ensure trade balance. Originality/value The originality of this paper is to estimate, in a dynamic framework, the aggregate and industry-specific elasticities and marginal products on investment, employment and output, allowing the identification of effects both on impact and over the long term. Although health care investments are expected to have important macroeconomic effects, they need not be evenly distributed across industries.

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