Convergence and determinants of anti-corruption disclosure among extractive firms in Africa

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
King Carl Tornam Duho ◽  
Cletus Agyenim-Boateng ◽  
Emmanuel Tetteh Asare ◽  
Joseph Mensah Onumah
Keyword(s):  
Fixed Effects ◽  
Academic Community ◽  
Global Reporting Initiative ◽  
Special Focus ◽  
African Countries ◽  
Firm Level ◽  
Content Type ◽  
Country Level ◽  
High Prevalence ◽  
National Enterprise

Purpose The purpose of this study is to examine the convergence and determinants of anti-corruption disclosures of extractive firms in Africa. Design/methodology/approach The study uses an unbalanced panel data of 27 firms operating in 5 African countries covering the period 2006 to 2018. Corporate data is collected from the global reporting initiative (GRI) database. The study uses an index to measure overall disclosure and individual items are coded as binary. The study uses fixed effects, panel logistic and panel-corrected standard error regression, depending on the type of dependent variable used. Findings The results indicate that the determinants of anti-corruption disclosure are membership in the United Nations global compact (UNGC) and Extractive Industry Transparency Initiative, multi-national enterprise status, corruption perception index and human development index (HDI). Specifically, UNGC membership and multi-national status enhance the disclosure on corruption analysis. Countries with a high prevalence of corruption tend to disclose more on corruption analysis. Disclosure on corruption training is high among firms that are UNGC signatories, countries with a high HDI and countries with a high prevalence of corruption. There is a weak effect of firm-level, industry-level and country-level factors on disclosures on corruption response. Research limitations/implications The study provides insights on the use of GRI 205: Anti-Corruption, which has relevant implications for practitioners, policymakers and the academic community. Originality/value This study is premier in exploring anti-corruption disclosure with a special focus on extractive firms in Africa. It is also unique in providing a test of both beta and sigma convergence among the firms.

How IFRS influence the relationship between the types of FDI and economic growth

2019 ◽  
Vol 21 (1) ◽  
pp. 60-76
Author(s):  
Orhan Akisik ◽  
Mzamo P. Mangaliso
Keyword(s):  
Economic Growth ◽  
Financial Reporting ◽  
Fixed Effects ◽  
Generalized Method Of Moments ◽  
African Countries ◽  
Content Type ◽  
Development Indicators ◽  
Country Level ◽  
Greenfield Investments ◽  
World Governance Indicators

Purpose The purpose of this paper is to examine the relationships between International Financial Reporting Standards (IFRS), types of foreign direct investment (FDI) – greenfield investments (GFIs) and mergers and acquisitions (M&As) – and economic growth in 49 African countries between 2003 and 2017. Design/methodology/approach In the study, panel data fixed effects and generalized method of moments estimation techniques are used in order to test the hypotheses. Findings Using country-level data obtained from the World Development Indicators, The United Nations Conference on Trade and Development and World Governance Indicators websites, the authors find that IFRS and the types of FDI are significantly related to economic growth. Moreover, our results provide evidence that the effect of GFIs and M&As on growth is influenced by IFRS positively. Research limitations/implications With a handful of exceptions, most African countries do not have active stock markets. Therefore, the authors were unable to determine the effect of capital markets on growth. Practical implications FDI has the potential to contribute to economic growth and quality of life. Our findings suggest that policymakers should create incentives for attracting FDI and effective enforcement of IFRS in order to unleash the benefits of FDI on their economies. Originality/value The study provides important insights into the effects of types of FDI on the economic growth of African countries and into the role that IFRS play on this relationship.

scholarly journals Financial constraint, trust, and export performances: firm-level evidence from Africa

2021 ◽  
pp. 1-23
Author(s):  
Maty Konte ◽  
Gideon Ndubuisi
Keyword(s):  
Financial Constraints ◽  
Interpersonal Trust ◽  
Negative Relationship ◽  
Financial Constraint ◽  
African Countries ◽  
Firm Level ◽  
Country Level ◽  
The World Bank ◽  
Negative Effect ◽  
Enterprise Surveys

Abstract Several existing studies have documented a negative relationship between firm financial constraint and export activities but do not attempt to examine factors that could attenuate this relationship in Africa. In this paper, we examine the effect of financial constraint on exports in Africa and explore how the level of trust in countries where firms are located shapes this relationship. We combine the World Bank Enterprise Surveys with different measures of country-level personal and interpersonal trust computed from the Afrobarometer surveys of 19 African countries. Our results show that financial constraints negatively affect export activities. However, this negative effect is attenuated for firms that are located in trust-intensive societies. These findings are robust to different specifications. Interestingly, we find that small and medium-sized enterprises in Africa are more likely to be affected by financial constraints but also more likely to benefit from a higher level of both personal and interpersonal trust, while for larger firms only interpersonal trust matters.

Evaluation and analysis of SDG reporting: evidence from Africa

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Olayinka Adedayo Erin ◽  
Omololu Adex Bamigboye
Keyword(s):  
Content Analysis ◽  
Global Reporting Initiative ◽  
Survey Method ◽  
Research Approach ◽  
African Countries ◽  
Content Type ◽  
Listed Firms ◽  
Business Reporting ◽  
Accounting Research ◽  
The Government

Purpose The 2030 Agenda and the sustainable development goals (SDG) have gained considerable attention in research and public debate. This calls for accounting research on the subject of SDG disclosure. Based on this premise, this paper aims to evaluate and analyze the extent of SDG reporting by 80 listed firms from 8 selected African countries for the period of 2016 to 2018. Design/methodology/approach The study adopts a content analysis and survey method to evaluate the extent of SDG reporting by the selected African countries. This paper conducted content analysis through the use of the PricewaterhouseCoopers (PwC) framework and Global Reporting Initiative (GRI) framework to gauge the extent of firms’ compliance with SDG reporting. Also, this paper uses the business reporting indicators for each SDG developed by GRI to determine the compliance level of the selected firms regarding SDG reporting. The survey was targeted at the big four audit firms (PwC, KPMG, Ernst and Young and Deloitte and Touche). Findings The evaluation of SDG disclosure by the 80 listed firms in Africa is still at a very low level except for South African firms. Also, the findings of the business reporting indicators for each SDG target show that most of the firms show little or no concern to report on SDG activities. The result of the research survey indicates that voluntary disclosure, lack of management commitment, lack of regulatory enforcement and cost implications account for low SDG disclosure by the selected African firms. Research limitations/implications This study fails to consider the qualitative research approach in determining the extent of SDG disclosure in Africa, as the study did not allow respondents to freely express their opinion on SDG disclosure, as a large part of the survey used close-ended questionnaires. Practical implications This study’s findings call for clear responsibility and a strong drive for SDG performance from corporate institutions in Africa. While the overall responsibility rests on the government, the actualization of SDG cannot be achieved without support from corporate organizations. The empirical approach used in this study emphasizes the need for corporate organizations to embrace sustainable practices and to integrate SDG information into their reporting cycle. Originality/value This study contributes to growing literature in the area of corporate reporting, sustainability reporting and SDG research in Africa and other emerging economies. Also, this study provides original insight into the contribution of accounting research toward the achievement of SDG.

scholarly journals How can national governance affect education quality in Western Europe?

2020 ◽  
Vol 21 (3) ◽  
pp. 413-426 ◽  
Author(s):  
Ali Gerged ◽  
Mohamed Elheddad
Keyword(s):  
Fixed Effects ◽  
Western Europe ◽  
Resource Scarcity ◽  
The Body ◽  
European Countries ◽  
Education Quality ◽  
Educational Institutions ◽  
Content Type ◽  
Country Level ◽  
Western European

Purpose As the international society faces unprecedented challenges associated with resource scarcity, governance scandals, increasing injustice and inequality, new opportunities for higher education institutions are emerging. This paper aims to investigate the association between national governance standards and education quality across nine western European countries, namely, the UK, Germany, France, Finland, Norway, Switzerland, Sweden, Denmark and Ireland. Design/methodology/approach Using panel data from 2002 to 2017, this paper uses fixed-effects and random-effects models to examine the relationship between national governance (proxied by voice and accountability (V&A) indicator) and education quality (proxied by human development index: education index). This analysis is supplemented with conducting instrumental variable (IV) estimations to address any concerns regarding the expected occurrence of endogeneity problems. Findings The findings are suggestive of a significant and positive relationship between national governance and education quality in Europe. This implies that national governance standards, such as V&A, are essential actors in the enhancement of the quality of educational institutions’ outcomes. Research limitations/implications Policymakers should implement stricter regulations and ensure that accountability indicators are motivated if they wish to increase the spending on education, which is associated with better qualities of educational institutions. A culture of continuous review of education policies needs to be upheld in the Western Europe region to be watchful of any emerging problems while maintaining a sustainable relationship between the rule of law and the education administration. Originality/value So far, a minimal number of studies focussed on examining the role of country-level governance in advancing education quality. This study, therefore, extends the body of prior literature by investigating the possible effect of national governance structures on education quality across a sample of Western European countries.

Access to skilled labor, institutions and firm performance in developing countries

2019 ◽  
Vol 40 (2) ◽  
pp. 328-355 ◽  
Author(s):  
Charilaos Mertzanis ◽  
Mona Said
Keyword(s):  
Developing Countries ◽  
Firm Performance ◽  
Technological Progress ◽  
Skilled Labor ◽  
Firm Level ◽  
Content Type ◽  
Country Level ◽  
Wide Range ◽  
Development Institutions

Purpose The purpose of this paper is to examine the role of access to skilled labor in explaining firms’ sales growth subject to the controlling influence of a wide range of firm-specific characteristics and country-level economic and non-economic factors. Design/methodology/approach The analysis uses a consistent and large firm-level data set from the World Bank’s Enterprise Surveys that includes 138 developing countries. An instrumental variables model with a GMM estimator is used for estimating the impact of access to skilled labor on firm performance. In order to obtain more robust estimators, the analysis introduces country-level controls reflecting the influence of economic and institutional factors, such as economic and financial development, institutional governance, education and technological progress. Findings The results document a significant and positive association between access to skilled labor and firm performance in the developing world. The explanatory power of access to skilled labor remains broadly robust after controlling for a wide range of firm-specific characteristics: sectoral and geographical influences matter. The results also show that the association between labor skill constraints and firm performance is mitigated by country-level factors but in diverse ways. Development, institutions, education and technological progress exert various mitigating effects on firm-level behavior regarding access to skilled labor. Originality/value The paper’s novel contribution is threefold: first, it uses joint firm, sector and country-level information to analyze the role of access to skilled labor on firm performance; second, it uses consistently produced information at the firm level from 138 developing countries; and, third, it considers the controlling impact of a wide range of country-level factors that reflect a country’s overall development, institutions and evolution.

Lending relationships, credit ratings and bank loan spreads: evidence from Indonesian listed companies

2020 ◽  
Vol 16 (4) ◽  
pp. 455-479
Author(s):  
Yane Chandera ◽  
Lukas Setia-Atmaja
Keyword(s):  
Fixed Effects ◽  
Credit Ratings ◽  
Listed Companies ◽  
Bank Loan ◽  
Least Squares Regression ◽  
Firm Level ◽  
Content Type ◽  
Lending Relationships ◽  
Loan Spreads ◽  
The Impact

PurposeThis study examines the impact of firm-bank relationships on bank loan spreads and the mitigating role of firm credit ratings on that impact.Design/methodology/approachThe study sample consists of Indonesian publicly listed companies for the period 2006 to 2016; bank-loan data was extracted from the Loan Pricing Corporation Dealscan database. For the degree of firm-bank relationships, the data on each loan is manually computed, using five different methods taken from Bharath et al. (2011) and Fields et al. (2012). All of the regression analyses are controlled for the year fixed effects, heteroscedasticity, and firm-level clustering. To address the endogeneity issues, this study uses several methods, including partitioning the sample, running nearest-neighbour and propensity score matching tests, and using instrumental variables in two-staged least-squares regression models.FindingsIn line with relationship theory and in opposition to the hold-up argument, this study finds that lending relationships reduce bank loan spreads and that the impact is more noticeable among non-rated Indonesian firms. Specifically, each additional unit in the total number of years of a firm-bank relationship and the number of previous loan contracts with the same bank are associated with 7.34 and 9.15 basis-point decreases, respectively, in these loan spreads.Practical implicationsCorporations and banks should maintain close, long-term relationships to reduce the screening and monitoring costs of borrowing. Regulators should create public policies that encourage banks to put more emphasis on relationships in their lending practices, especially in relation to crisis-prone companies.Originality/valueTo the best of the authors’ knowledge, this is the first study to examine the impact of lending relationships on bank loan spreads in Indonesia. The study offers insights on banking relationships in emerging markets with concentrated banking industries, underdeveloped capital markets and prominent business-group affiliations.

scholarly journals The effect of Islamic values on voluntary corporate governance disclosure

2017 ◽  
Vol 8 (2) ◽  
pp. 182-202 ◽  
Author(s):  
Waleed M. Albassam ◽  
Collins G. Ntim
Keyword(s):  
Corporate Governance ◽  
Fixed Effects ◽  
Future Research ◽  
Government Ownership ◽  
Firm Level ◽  
Content Type ◽  
Listed Firms ◽  
Alternative Measures ◽  
Islamic Values ◽  
Practical Implications

Purpose The study aims to examine the effect of Islamic values on the extent of voluntary corporate governance (CG) disclosure. In addition, the authors investigate the effect of traditional ownership structure and CG mechanisms on the extent of voluntary CG disclosure. Design/methodology/approach The authors distinctively construct Islamic values and voluntary CG disclosure indices using a sample of 75 Saudi-listed firms over a seven-year period in conducting multivariate regressions of the effect of Islamic values on the extent of voluntary CG disclosure. The analyses are robust to controlling for firm-level characteristics, fixed-effects, endogeneities and alternative measures. Findings The authors find that corporations that depict greater commitment towards incorporating Islamic values into their operations through high Islamic values disclosure index score engage in higher voluntary CG disclosures than those that are not. Additionally, the authors find that audit firm size, board size, government ownership, institutional ownership and the presence of a CG committee are positively associated with the level of voluntary CG disclosure, whereas block ownership is negatively associated with the extent of voluntary CG disclosure. Practical implications The study has clear practical implications for future research, practice and broader society by demonstrating empirically that corporations that voluntarily incorporate Islamic values into their operations are more likely to be transparent about their CG practices and thereby providing new crucial insights on the effect of Islamic values on voluntary CG compliance and disclosure. Originality/value This is the first empirical attempt at explicitly examining the effect of Islamic values on the extent of voluntary CG disclosure. The authors also offer evidence on the effect of traditional CG and ownership structures on the extent of voluntary CG disclosure.

The finance of innovation in Africa

2019 ◽  
Vol 23 (3) ◽  
pp. 348-382 ◽  
Author(s):  
Misraku Molla Ayalew ◽  
Zhang Xianzhi ◽  
Demis Hailegebreal Hailu
Keyword(s):  
Developing Countries ◽  
Trade Credit ◽  
Innovation Process ◽  
Medium Size ◽  
African Countries ◽  
Firm Level ◽  
Content Type ◽  
Significant Difference ◽  
Innovative Firms ◽  
Finance Innovation

Purpose The purpose of this paper is to investigate how firms in developing countries finance innovation. Notably, the study seeks to investigate whether innovative firms exhibit financing patterns different from those of non-innovative ones. It also examines the effect of financing sources on firm’s probability to innovate. Design/methodology/approach The study utilizes firm-level data from the World Bank Enterprise Survey. From 28 African countries, 11,173 firms have been included in the sample. A statistical t-test is used for two independent samples and logistic regression models. Findings The results show that innovative firms, specifically innovative small- and medium-size firms exhibit financing patterns different from non-innovative peers. Further analysis indicates that there is no statistically significant difference between the financing patterns of innovative and non-innovative large firms. In Africa, innovation is mostly financed using internal sources and bank finance. Equity finance and bank finance have shown a higher effect followed by internal finance, finance from non-bank financial institutions and trade credit finance on firms’ probability to innovate. Practical implications The management of innovative firms should reduce dependency on short-term and retained earning financing and increase the use of long-term instruments improve innovation performance. Social implications A pending policy task for African leaders is to design and evaluate reforms to create a strong financial sector that willing to support the innovation process. Originality/value This study contributes to the existent literature on finance of innovation by examining how firms finance innovation activities in developing countries. This study provides evidence on how innovative firms exhibit financing patterns different from non-innovative ones from developing countries.

Capital flight and extent of corruption control in the least corrupt African countries

2019 ◽  
Vol 13 (3) ◽  
pp. 469-483 ◽  
Author(s):  
Thales Pacific Yapatake Kossele ◽  
Magalie Gabriella Ngaba Mbai-Akem
Keyword(s):  
Sustainable Development ◽  
Fixed Effects ◽  
Negative Impact ◽  
Economic Environment ◽  
Capital Flight ◽  
African Countries ◽  
Content Type ◽  
The Sustainable Development ◽  
The Government ◽  
Practical Implications

Purpose The purpose of this paper is to investigate the effect of corruption control on capital flight in the least corrupt African countries. Design/methodology/approach Using panel data covering the period of 1996-2010. Findings The results show that the extent of corruption, the total natural resources rent are statistically significant and affect positively the capital across the pooled, random and fixed effects. Inflation and economic growth are also found to have a negative impact on capital flight. Moreover, the exchange rate has a negative and significant effect on capital flight. Practical implications The findings of this study suggest that the extent of corruption control by responsible institutions can be considered as one of the most effective weapons in the fight against capital flight in the least corrupt African countries. Social implications The paper recommends to the government of the least corrupt countries in Africa to create an enabling political and economic environment for investor’s attractiveness. This, in turn, will reduce the occurrence of capital flight and lead to the sustainable development. Originality/value The findings of this study suggest that the extent of corruption control by responsible institutions can be considered as one of the most effective weapons in the fight against capital flight in the least corrupt African countries. The paper recommends to the government of the least corrupt countries in Africa to create an enabling political and economic environment for investor’s attractiveness. This, in turn, will reduce the occurrence of capital flight and lead to the sustainable development.

Age-related productivity decrease in high-waged and low-waged employees

2019 ◽  
Vol 40 (6) ◽  
pp. 1151-1170
Author(s):  
Liis Roosaar ◽  
Jaan Masso ◽  
Urmas Varblane
Keyword(s):  
Fixed Effects ◽  
Manufacturing Industry ◽  
Labour Productivity ◽  
Firm Level ◽  
Content Type ◽  
Older Employees ◽  
Age Related ◽  
Knowledge Intensive ◽  
Relative Productivity ◽  
Practical Implications

Purpose The purpose of this paper is to clarify whether the age-productivity curve is different for low-waged and high-waged employees. Design/methodology/approach Productivity growth is decomposed at the firm level into contributions by hired, separated and staying workers. Based on a matched employer-employee database of Estonian firms from 2006 to 2014 and considering the age as well as wages of employees, a panel data model with fixed effects is constructed to show the relative productivity of each cohort of employees. Findings High-waged employees appeared to be relatively more productive than low-waged employees and middle-aged were more productive than young or old employees. However, the productivity difference between young and old employees was not statistically significant. The age-productivity curve of high-waged employees appeared to be flatter than that of low-waged employees. Only in knowledge intensive services were the low-waged old employees statistically significantly less productive than high-waged old employees. In the manufacturing industry, the young were more productive than in services, in knowledge intensive services the old were less productive than in traditional services. Research limitations/implications The productivity of employees is only analysed for cohorts of employees. Practical implications Employers can be encouraged to hire older employees because old employees are shown to remain at least as productive as young employees. Originality/value The decomposition of labour productivity at the firm level is further developed, as the statistical difference between the productivity of different groups of employees is analysed.

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