Bank capital and liquidity creation: new evidence from a quantile regression approach

2018 ◽  
Vol 44 (12) ◽  
pp. 1382-1400 ◽  
Author(s):  
Manel Mazioud Chaabouni ◽  
Haykel Zouaoui ◽  
Nidhal Ziedi Ellouz
Keyword(s):  
Quantile Regression ◽  
Instrumental Variables ◽  
Ordinary Least Squares ◽  
Panel Regression ◽  
Bank Capital ◽  
Content Type ◽  
Novel Approach ◽  
Regression Approach ◽  
New Evidence ◽  
The Relationship

Purpose The purpose of this paper is to examine the effect of bank capital on liquidity creation. Especially, the authors test two competing hypotheses: the “risk absorption” hypothesis and the “financial fragility-crowding out” hypothesis that describe such association in the context of UK and French banking industry. Design/methodology/approach The authors use data collected from Bankscope for commercial banks pertaining to the aforementioned countries. The sample period ranges from 2000 to 2014. Liquidity creation was measured using a novel approach proposed by Berger and Bouwman (2007). This study uses the quantile regression (QR) and the instrumental variables QR, along with classical ordinary least squares (OLS) and panel regression, to deal with the mixed results reported by previous papers. Findings Using OLS and panel regression, the authors first find that bank capital negatively affects liquidity creation which supports risk absorption hypothesis. Second, the result from QR confirms the negative association between the aforementioned variables and shows that the effect is homogenous across quantiles of liquidity creation distribution. The result remains unchanged when using the QR with instrumental variables to address the potential problem of endogeneity. Originality/value This paper sheds more lights on the relationship between bank capital and liquidity creation by using a novel estimation approach based on the QR methodology.

scholarly journals Trustee board diversity, governance mechanisms, capital structure and performance in UK charities

2018 ◽  
Vol 18 (3) ◽  
pp. 478-508 ◽  
Author(s):  
Mohamed H. Elmagrhi ◽  
Collins G. Ntim ◽  
John Malagila ◽  
Samuel Fosu ◽  
Abongeh A. Tunyi
Keyword(s):  
Capital Structure ◽  
Least Squares ◽  
Fixed Effects ◽  
Ordinary Least Squares ◽  
Moderating Effect ◽  
Board Diversity ◽  
Content Type ◽  
The Impact ◽  
New Evidence ◽  
The Relationship

PurposeThis paper aims to investigate the association among trustee board diversity (TBD), corporate governance (CG), capital structure (CS) and financial performance (FP) by using a sample of UK charities. Specifically, the authors investigate the effect of TBD on CS and ascertain whether CG quality moderates the TBD–CS nexus. Additionally, the authors examine the impact of CS on FP and ascertain whether the CS–FP nexus is moderated by TBD and CG quality.Design/methodology/approachThe authors use a number of multivariate regression techniques, including ordinary least squares, fixed-effects, lagged-effects and two-stage least squares, to rigorously analyse the data and test the hypotheses.FindingsFirst, the authors find that trustee board gender diversity has a negative effect on CS, but this relationship holds only up to the point of having three women trustees. The authors find similar, but relatively weak, results for the presence of black, Asian and minority ethnic (BAME) trustees. Second, the authors find that the TBD–CS nexus depends on the quality of CG, with the relationship being stronger in charities with higher frequency of meetings, independent CG committee and larger trustee and audit firm size. Third, the authors find that CS structure has a positive effect on FP, but this is moderated by TBD and CG quality. The evidence is robust to different econometric models that adjust for alternative measures and endogeneities. The authors interpret the findings within explanations of a theoretical perspective that captures insights from different CG and CS theories.Originality/valueExisting studies that explore TBD, CG, CS and FP in charities are rare. This study distinctively attempts to address this empirical lacuna within the extant literature by providing four new insights with specific focus on UK charities. First, the authors provide new evidence on the relationship between TBD and CS. Second, the authors offer new evidence on the moderating effect of CG on the TBD-CS nexus. Third, the authors provide new evidence on the effect of CS on FP. Finally, the authors offer new evidence on the moderating effect of TBD and CG on the CS–FP nexus.

scholarly journals Energy performance certificates and house prices: a quantile regression approach

2020 ◽  
Vol 13 (3) ◽  
pp. 409-434 ◽  
Author(s):  
Michael McCord ◽  
Martin Haran ◽  
Peadar Davis ◽  
John McCord
Keyword(s):  
Energy Efficiency ◽  
Quantile Regression ◽  
House Prices ◽  
Energy Performance ◽  
Data Set ◽  
Content Type ◽  
Conditional Mean ◽  
Price Distribution ◽  
Regression Approach ◽  
The Relationship

Purpose A number of studies have investigated the relationship between energy performance certificates (EPCs) and house prices. A majority of studies have tended to model energy performance pricing effects within a traditional hedonic conditional mean estimate model. There has been limited analysis that has accounted for the relationship between EPCs and the effects across the pricing distribution. Moreover, there has been limited research examining the “standard cost improvements EPC score”, or “potential score”. Therefore, this paper aims to quantify and measure the dynamic effects of EPCs on house prices across the price spectrum and account for standardised cost-effective retrofit improvements. Design/methodology/approach Existing EPC studies produce one coefficient for the entirety of the pricing distribution, culminating in a single marginal implicit price effect. The approach within this study applies a quantile regression approach to empirically estimate how quantiles of house prices respond differently to unitary changes in the proximal effects of EPCs and structural property characteristics across the conditional distribution of house prices. Using a data set of 1,476 achieved transaction prices, the quantile regression models apply both assessed EPC score and bands and further examine the potential EPC rating for improved energy performance based on an average energy cost improvement. Findings The findings show that EPCs are valued differently across the quantiles and that conditional quantiles are asymmetrical. Only property prices in the upper quantiles of the price distribution show significant capitalisation effects with energy performance, and only properties with higher EPC scores display positive significant effects at the higher end of the price distribution. There are also brown discount effects evident for lower-rated properties within F- and G-rated EPC properties at the higher end of the pricing distribution. Moreover, the potential energy efficiency rating (score) also shows increased effects with sales prices and appears to minimise any brown discount effects. The findings imply that energy performance is a complex feature that is not easily “averaged” for valuation effect purposes. Originality/value While numerous studies have investigated the pricing effects of EPCs, they have tended to provide a single estimate to determine the relationship with price. This paper extends the traditional analytical insights beyond the conditional mean estimate by examining the quantiles of the relationship between EPCs and house prices to enhance the understanding of this esoteric and complex issue. In addition, this research applies the assessed energy efficiency potential to establish whether effective cost improvements enhance the relationship with sales price and capitalisation effects.

Board characteristics and real performance in Malaysian state-owned enterprises (SOEs)

2017 ◽  
Vol 66 (8) ◽  
pp. 1064-1086 ◽  
Author(s):  
Fekri Ali Shawtari ◽  
Muslim Har Sani Mohamad ◽  
Hafiz Majdi Abdul Rashid ◽  
Abdullah Moh’d Ayedh
Keyword(s):  
Quantile Regression ◽  
Ordinary Least Squares ◽  
Performance Measure ◽  
Influential Factor ◽  
New Developments ◽  
Content Type ◽  
Board Characteristics ◽  
Real Performance ◽  
The Impact ◽  
The Relationship

Purpose The purpose of this paper is to investigate the relationship between board characteristics and real performance among state-owned enterprises (SOEs) in Malaysia in a longitudinal period following the introduction of transformation policy. Design/methodology/approach The study deviates from prior research in utilising a real performance measure rather than traditional measures of performance. The authors adopt the quantile regression approach to examine the impact of board characteristics on real performance in a comparison using ordinary least squares. Findings The results of quantile regression reveal that the impact of board mechanisms on real performance was not as expected. Specifically, board size and duality had a bearing on real performance. Board independence also is considered as influential factor through the time. However, such effects were not homogenous across different quantiles. The dummy year variable to compare the period pre- and post-transformation policy reveals that the dummy year is not significant, indicating that performance post-transformation is indifferent compared to the pre-transformation policy period. Practical implications It is important for government to reconsider the policies embedded in the transformation policy. This study provides insights on the enhancement of board effectiveness and new developments regarding GLCs. Originality/value This is an early to attempt to measure real performance and its link to board characteristics in SOEs post-transformation policy.

A quantile regression analysis on corporate governance and the cost of bank loans: a research note

2015 ◽  
Vol 14 (1) ◽  
pp. 2-19 ◽  
Author(s):  
Wuchun Chi ◽  
Huichi Huang ◽  
Hong Xie
Keyword(s):  
Interest Rate ◽  
Quantile Regression ◽  
Ordinary Least Squares ◽  
Regression Method ◽  
Bank Loan ◽  
Content Type ◽  
Loan Rate ◽  
Prior Literature ◽  
Quantile Regression Method ◽  
The Relationship

Purpose – This paper aims to investigate whether there is heterogeneity in the relationship between the bank loan interest rate and its determinants using the quantile regression method and to reconcile some conflicting findings in prior literature. Design/methodology/approach – First, the effects of 18 determinants were examined on the bank loan interest rate using the ordinary least squares method (OLS). Second, it was investigated whether the relationship between the loan rate and its determinants is heterogeneous across quantiles of loan rates using the quantile regression method. Findings – Considerable heterogeneity was found in the relationship between the loan rate and its determinants. Specifically, a determinant that is beneficial for the bank loan rate, on average, as revealed by the OLS method may become unimportant or even detrimental for firms located at extremely high or low loan rate quantiles. By revealing extreme heterogeneity in the relationship between the loan rate and some of its determinants, the authors potentially explain two conflicting findings in prior literature. Originality/value – The conventional OLS method masks the heterogeneity in the relationship between the bank loan interest rate and its determinants. Quantile regression can be used to supplement the OLS estimates to gain a more detailed and complete picture of the relationship between the dependent variable and explanatory variables.

Racial dissimilarity and diversity climate effect organizational identification

2016 ◽  
Vol 35 (5/6) ◽  
pp. 314-327 ◽  
Author(s):  
Brooklyn Cole ◽  
Raymond J. Jones ◽  
Lisa M. Russell
Keyword(s):  
Organizational Identification ◽  
Turnover Intentions ◽  
Ordinary Least Squares ◽  
Important Variable ◽  
Hierarchical Regression ◽  
Diversity Climate ◽  
Climate Effect ◽  
Content Type ◽  
The Impact ◽  
The Relationship

Purpose The purpose of this paper is to empirically examine the relationship between psychological diversity climate (PDC) and organizational identification (OID) when influenced by racial dissimilarity between the subordinate and supervisor. Design/methodology/approach Ordinary least squares hierarchical regression analysis was run for hypotheses testing. Findings Three of the four hypothesized relationships were supported. Support was found for the direct relationship between PDC and OID. The moderator race was significant thus also supported. The moderator of dissimilarity was not supported. Finally the three-way interaction with race and dissimilarity was supported. Practical implications OID is an important variable for overall organizational success. OID influences a wealth of organizationally relevant outcomes including turnover intentions. Considering higher turnover exists for minority employees, understanding how diversity climate perceptions vary by employee race and therefore impact OID differently, helps managers when making decisions about various initiatives. Originality/value This study is the first the authors know of to investigate the impact of dissimilarity on the PDC-OID relationship.

The impact of executives’ perceptions of environmental threats and organizational slack on innovation strategies

2016 ◽  
Vol 7 (2) ◽  
pp. 216-230 ◽  
Author(s):  
Chengyuan Wang ◽  
Biao Luo ◽  
Yong Liu ◽  
Zhengyun Wei
Keyword(s):  
Cognitive Theory ◽  
Environmental Changes ◽  
Ordinary Least Squares ◽  
Organizational Slack ◽  
Least Squares Regression ◽  
Content Type ◽  
Environmental Threats ◽  
Innovation Strategies ◽  
The Impact ◽  
The Relationship

Purpose The paper aims to study the relationship between executives’ perceptions of environmental threats and innovation strategies and investigate the moderating effect of contextual factor (i.e. organizational slack) on such relations. It proposes a dualistic relationship between executives’ perceptions of environmental threats and innovation strategies, in which different perceptions of environmental threats will lead to corresponding innovation strategies, and dyadic organizational slack can promote such processes. Design/methodology/approach The paper is based on a survey with 163 valid questionnaires, which were all completed by executives. Hierarchical ordinary least-squares regression analysis is used to test the hypotheses proposed in this paper. Findings The paper provides empirical insights about that executives tend to choose exploratory innovation when they perceive environmental changes as likely loss threats, yet adopt exploitative innovation when perceiving control-reducing threats. Furthermore, unabsorbed slack (e.g. financial redundancy) positively moderates both relationships, while absorbed slack (e.g. operational redundancy) merely positively influences the relationship between the perception of control-reducing threats and exploitative innovation. Originality/value The paper bridges the gap between organizational innovation and cognitive theory by proposing a dualistic relationship between executives’ perceptions of environmental threats and innovation strategies. The paper further enriches innovation studies by jointly considering both subjective and objective influence factors of innovation and argues that organizational slack can moderate such dualistic relationship.

Audit committee characteristics and the moderating effect of Malaysian code of corporate governance on IPO liquidity

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Amal Mohammed Al-Masawa ◽  
Rasidah Mohd-Rashid ◽  
Hamdan Amer Al-Jaifi ◽  
Shaker Dahan Al-Duais
Keyword(s):  
Corporate Governance ◽  
Initial Public Offerings ◽  
Audit Committee ◽  
Ordinary Least Squares ◽  
Moderating Effect ◽  
Least Squares Regression ◽  
Content Type ◽  
Code Of Corporate Governance ◽  
The Impact ◽  
The Relationship

Purpose This study aims to investigate the link between audit committee characteristics and the liquidity of initial public offerings (IPOs) in Malaysia, which is an emerging economy in Southeast Asia. Another purpose of this study is to examine the moderating effect of the revised Malaysian code of corporate governance (MCCG) on the link between audit committee characteristics and IPO liquidity. Design/methodology/approach The final sample consists of 304 Malaysian IPOs listed in 2002–2017. This study uses ordinary least squares regression method to analyse the data. To confirm this study’s findings, a hierarchical or four-stage regression analysis is used to compare the t-values of the main and moderate regression models. Findings The findings show that audit committee characteristics (size and director independence) have a positive and significant relationship with IPO liquidity. Also, the revised MCCG positively moderates the relationship between audit committee characteristics and IPO liquidity. Research limitations/implications This study’s findings indicate that companies with higher audit committee independence have a more effective monitoring mechanism that mitigates information asymmetry, thus reducing adverse selection issues during share trading. Practical implications Policymakers could use the results of this study in developing policies for IPO liquidity improvements. Additionally, the findings are useful for traders and investors in their investment decision-making. For companies, the findings highlight the crucial role of the audit committee as part of the control system that monitors corporate governance. Originality/value To the authors’ knowledge, this work is a pioneering study in the context of a developing country, specifically Malaysia that investigates the impact of audit committee characteristics on IPO liquidity. Previously, the link between corporate governance and IPO liquidity had not been investigated in Malaysia. This study also contributes to the IPO literature by providing empirical evidence regarding the moderating effect of the revised MCCG on the relationship between audit committee characteristics and IPO liquidity.

A quantile regression approach to evaluate the relative impact of global and local factors on the MENA stock markets

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Slah Bahloul ◽  
Nawel Ben Amor
Keyword(s):  
Stock Market ◽  
Quantile Regression ◽  
Stock Returns ◽  
Stock Markets ◽  
Financial Integration ◽  
Ordinary Least Squares ◽  
Market Returns ◽  
Stock Market Returns ◽  
Content Type ◽  
The Impact

PurposeThis paper investigates the relative importance of local macroeconomic and global factors in the explanation of twelve MENA (Middle East and North Africa) stock market returns across the different quantiles in order to determine their degree of international financial integration.Design/methodology/approachThe authors use both ordinary least squares and quantile regressions from January 2007 to January 2018. Quantile regression permits to know how the effects of explanatory variables vary across the different states of the market.FindingsThe results of this paper indicate that the impact of local macroeconomic and global factors differs across the quantiles and markets. Generally, there are wide ranges in degree of international integration and most of MENA stock markets appear to be weakly integrated. This reveals that the portfolio diversification within the stock markets in this region is still beneficial.Originality/valueThis paper is original for two reasons. First, it emphasizes, over a fairly long period, the impact of a large number of macroeconomic and global variables on the MENA stock market returns. Second, it examines if the relative effects of these factors on MENA stock returns vary or not across the market states and MENA countries.

Teacher-principal race and teacher satisfaction over time, region

2017 ◽  
Vol 55 (6) ◽  
pp. 624-639
Author(s):  
Samantha L. Viano ◽  
Seth B. Hunter
Keyword(s):  
Job Satisfaction ◽  
Fixed Effects ◽  
White Teachers ◽  
Ordinary Least Squares ◽  
Teacher Job Satisfaction ◽  
Southern Region ◽  
Content Type ◽  
Black Principals ◽  
The Relationship ◽  
Over Time

Purpose The purpose of this paper is to replicate prior findings on teacher-principal race congruence and teacher job satisfaction and extend the literature by investigating trends over time and if the relationship between race congruence and teacher job satisfaction differs by principal race and region. Design/methodology/approach The study sample comes from four waves of cross-sectional data, the nationally representative Schools and Staffing Survey, administered between 2000 and 2012. The analysis is conducted using ordinary least squares and school-year fixed effects with a comprehensive set of covariates. Findings The relationship between race congruence and teacher job satisfaction is attenuating over time and is likely explained by the lower job satisfaction of white teachers who work for black principals. Some evidence indicates teacher-principal race congruence has greater salience in the Southern region of the country. Find evidence that teachers with race-congruent principals report more workplace support than their non-race congruent colleagues. Research limitations/implications Future studies should investigate why racial congruence has more salience in the Southern region of the country and for white teachers who work with black principals. At the same time, results indicate that teacher-principal race congruence might no longer be a determinant of teacher job satisfaction, although further studies should continue investigating this relationship. Originality/value Findings on the changing nature of the relationship between principal-teacher race congruence and teacher job satisfaction over time as well as the differing nature of race congruence in the Southern region of the country are both novel findings in the literature.

Accounting conservatism, corporate governance and political connections

2017 ◽  
Vol 25 (2) ◽  
pp. 288-318 ◽  
Author(s):  
Nor Farizal Mohammed ◽  
Kamran Ahmed ◽  
Xu-Dong Ji
Keyword(s):  
Corporate Governance ◽  
Emerging Market ◽  
Political Influence ◽  
Ordinary Least Squares ◽  
Accounting Conservatism ◽  
Political Connections ◽  
Board Independence ◽  
Political Connection ◽  
Content Type ◽  
The Relationship

Purpose The purpose of this paper is to examine the relationship between accounting conservatism, corporate governance and political connection in listed firms in Malaysia where political influence plays a significant role in the capital market and in many business dealings. Design/methodology/approach By utilizing 824 firm-year observations comprising large listed companies over a period of four years from 2004, this study uses ordinary least squares regression models to investigate the relationship between accounting conservatism, corporate governance and political connections in Malaysia. Multiple measures of conservatism developed by Basu (1997) and Khan and Watts (2009) are employed. Findings The results show evidence of accounting conservatism (bad news being recognized earlier than good news) in Malaysia. Further, the results reveal that better corporate governance structure in terms of board independence is positively associated with accounting conservatism while management ownership is negatively associated with it. However, political connection has a negative moderating effect on the positive relationship between accounting conservatism and board independence. The results also suggest political connections have a positive association with firm’s future performance. Originality/value This study is the first in investigating the effect of political connections on accounting conservatism in Malaysian context and how political connections negatively affect the monitoring role of the corporate boards. By directly measuring political connection and controlling for various corporate governance mechanisms and firm-specific attributes, this study contributes to enhance the authors’ understanding of the political influence in financial reporting quality and firm performance in an emerging market setting.

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