Corporate governance and brand performance

2014 ◽  
Vol 37 (1) ◽  
pp. 45-68 ◽  
Author(s):  
Luu Trong Tuan
Keyword(s):  
Corporate Governance ◽  
Structural Equation ◽  
Stock Exchange ◽  
Listed Companies ◽  
Middle Level ◽  
Brand Performance ◽  
Content Type ◽  
Mediating Role ◽  
Construction Of Knowledge ◽  
Knowledge Based

Purpose – This investigation into listed companies at the Ho Chi Minh City Stock Exchange (HOSE) in Vietnam aims to discern whether such constructs as trust and ethics act as precursors for brand performance with the mediating role of corporate governance. Design/methodology/approach – Three hundred and twelve responses returned from self-administered structured questionnaires relayed to 1,163 middle-level managers were dissected via ANOVAs and structural equation modelling. Findings – From the findings emerged the interconnections between ethics of justice and calculation-based trust. Ethics of care, on the other hand, tends to cultivate knowledge-based trust and identification-based trust, which in turn positively impact corporate governance. The findings also paved the path from strong corporate governance to high brand performance. Originality/value – From the findings of the study, the insight into the interconnection pattern of brand performance and its antecedents highlights the magnitude of ethics training program as well as the construction of knowledge-based trust, identification-based trust as well as strong corporate governance in optimizing brand performance in listed companies in Vietnam market.

Relationship between corporate governance and audit switching: Iranian evidence

2017 ◽  
Vol 59 (5) ◽  
pp. 673-686
Author(s):  
Mahdi Salehi ◽  
Ali Asgar Alinya
Keyword(s):  
Corporate Governance ◽  
Design Methodology ◽  
Stock Exchange ◽  
Listed Companies ◽  
Panel Analysis ◽  
Cross Sectional ◽  
Content Type ◽  
Effective Factors ◽  
Dependent Variables ◽  
The Relationship

Purpose This paper aims to investigate the relationship between corporate governance and auditors switching of listed companies on the Tehran Stock Exchange. Design/methodology/approach To achieve the objectives of this study, 12 hypotheses developed which and tests the relationship between corporate governance and selecting and switching auditors in Iran during 2008-20014 by selecting 116 listed companies on the Tehran Stock Exchange. To test the hypotheses, the cross-sectional time-series nature of research variables data, panel analysis is used. Also, to investigate the relationship between independent and dependent variables in each year, the logistic regression is used. Findings The results of the study indicate that there is a weak relationship between corporate governance auditors switching. Therefore, it could be concluded that there are some other effective factors on which selecting and switching auditors in studied companies are more dependent. Originality/value The current study is almost the first study which has been conducted in Iran, so the results of the study may be beneficial to the Iranian conditions as well as other developing countries.

Impact of corporate governance on capital structure: mediating role of cost of capital

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Aisha Javaid ◽  
Mian Sajid Nazir ◽  
Kaneez Fatima
Keyword(s):  
Corporate Governance ◽  
Capital Structure ◽  
Cost Of Capital ◽  
Stock Exchange ◽  
Institutional Ownership ◽  
Managerial Ownership ◽  
Content Type ◽  
Mediating Role ◽  
The Relationship

PurposeThis paper contributes to the existing literature by extending the empirical work on the relationship between corporate governance and capital structure by analyzing the mediating role of cost of capital in the non-financial firms listed on the Pakistan Stock Exchange (PSX).Design/methodology/approachThe sample for this study includes non-financial firms listed on the Pakistan Stock Exchange (formerly Karachi Stock Exchange) for the period of 2004–2016. Based on 1800 firm-year observations, three approaches of panel data analysis are applied for the step-wise analysis of the underlying study. Firstly, Pooled OLS is applied. Secondly, fixed and random effect panel regression followed by the Hausman test to check the unobservable individual heterogeneity of the data. Hausman test indicates that the fixed-effects model is the most appropriate model for the sample panel data.FindingsThe study's findings are that board size, board composition, CEO/Chair duality, institutional ownership and managerial ownership have statistically significant direct effect on the firm's financing decisions. However, CEO/Chair duality, institutional ownership and managerial ownership have significant indirect effect on firm's capital structure decisions. The interesting finding of the paper is on the evidence of mediating role of cost of capital in the nexus of corporate governance and capital structure. Moreover, some conventional determinants of capital structure, including the firm's size, asset structure of the firm, profitability, business risk and growth, are found as determinants of capital structure decisions of the firms.Research limitations/implicationsThere are a few limitations to our study which could be addressed by upcoming research. We did not include all the four mechanisms of corporate governance including board structure, audit structure, compensation structure and ownership structure. However, we used only five important attributes including board size, board composition and CEO/Chair duality form board structure, managerial ownership and institutional ownership form ownership structure of corporate governance as our explanatory variables to examine their impact on the capital structure choices of the firms. Future studies may fill this research gap by involving some other attributes of corporate governance and analyzing their effectiveness and impact on value relevant capital structure decisions. Further, due to limited time and resources, we only tested the mediating role of cost of capital, hence, future researchers can analyze the mediating and moderating roles of different variables which may influence the relationship between corporate governance and capital structure choices of the firms.Practical implicationsThe study has many valuable guidelines and practical implications for the financial managers of the corporations. Our results will facilitate the policymakers in setting their corporate governance policies and practices and making the value relevant capital structure decisions in compliance with the implications of corporate governance mechanism. In addition, our study provides the empirical evidence in accordance with the argument that good governance practices, particularly the voluntary disclosures by the firm may reduce the information asymmetry which, ultimately, reduces the agency cost and the cost of capital for the firm. However, while deciding the financial policy of the corporations, managers can use our findings in order to assess the effectiveness of corporate governance practices employed by the firm in achieving the optimal capital structure at which the weighted average cost of capital is at its minimum level.Originality/valueThis paper contributes to the literature by investigating the mediating role of the cost of capital in the relationship between corporate governance and capital structure decisions of the firms. This paper provides empirical evidence that corporate governance indirectly affects capital structure decisions through the mediating role of cost of capital.

Stock exchange brands as an influence on investor behavior

2017 ◽  
Vol 35 (3) ◽  
pp. 391-410 ◽  
Author(s):  
Betül Çal ◽  
Mary Lambkin
Keyword(s):  
Brand Equity ◽  
Structural Equation ◽  
Online Survey ◽  
Stock Exchange ◽  
Equation Modeling ◽  
Content Type ◽  
Mediating Role ◽  
The Impact ◽  
Corporate Brands

Purpose The purpose of this paper is to investigate the effect of stock exchange-related brand equity on intention to invest and the mediating role of perceived risk (PR) in this relationship in a comparative analysis between a developed and a developing market. Design/methodology/approach The study is carried out through an online survey among financially literate adults in two countries, Turkey and Ireland. Structural equation modeling is used to empirically test the relationships between brand equity dimensions and intention to invest, with a mediating role of PR. Findings The results indicate that the brand equity of a stock exchange is a relevant construct that significantly influences intention to invest. Also, the mediating role of PR is found to be strong in a developing market such as Turkey, but weak in a developed market like Ireland. Research limitations/implications One limitation of this paper is its inclusion of individual investors as the unit of analysis while leaving out institutional ones. The second limitation is the difficulty in generalizing the results to overall country populations. Practical implications This paper offers managerial implications regarding the need for emphasizing “stock exchange brand,” besides corporate brands traded, and customizing the management of brand-related influencers in investment decisions according to country context. Originality/value The impact of corporate brands in investment choices has been demonstrated before, but the influence of intermediaries – stock exchanges – through which investments are transacted, has not yet been investigated. This study addresses this gap, and further shows the differing extent of PR in this relationship between a developed and a developing country setting.

Institutional antecedents of principle-based corporate governance practices

2014 ◽  
Vol 10 (1) ◽  
pp. 49-82 ◽  
Author(s):  
Krishna Reddy ◽  
Umesh Sharma
Keyword(s):  
Corporate Governance ◽  
Capital Market ◽  
Stock Exchange ◽  
Listed Companies ◽  
Ordinary Least Squares ◽  
Positive Influence ◽  
Tobin’S Q ◽  
Tobin's Q ◽  
Content Type ◽  
Governance Practices

Purpose – This study aims to investigate the nature and extent of compliance to the principle-based corporate governance initiatives by the listed companies in the South Pacific Stock Exchange (SPSE) in Fiji. Three important questions are addressed: whether listed companies in Fiji have complied with the principle-based governance practices? Did compliance with principle-based recommendations lead to an improvement in the listed company's financial performance and legitimacy? How the institutional factors have contributed towards corporate governance practices in Fiji? Design/methodology/approach – Panel data for the SPSE companies over the period 2008-2011 are analysed using ordinary least squares (OLS) regression. Tobin's Q and return on assets (ROA) metrics are used as dependent variables. Findings – The findings indicate that listed companies have adopted the Capital Market Development Authority's (CMDA) recommendations by establishing subcommittees for audit and remuneration, having non-executive/independent directors on the board and separate chair and CEO positions in order to gain legitimacy from stakeholders. Results support the view that the CMDA recommendations of board sub-committees (audit and remuneration) have had positive influence on company performance measured by Tobin's Q. The findings of this study give support to the principle-based corporate governance practices adopted in Fiji to gain legitimacy. Originality/value – The study adds to the governance literature by focusing on the principle-based governance practices in a small remote island country, Fiji which has relatively small economy, capital market and company size. Finally, the study adds to institutional theory by showing how companies' corporate governance choices are affected by the severity of agency conflicts and the way corporate governance is regulated.

scholarly journals Company characteristics and compliance with ASX corporate governance principles

2015 ◽  
Vol 27 (3) ◽  
pp. 373-392 ◽  
Author(s):  
Tek Lama ◽  
Warwick Wyndham Anderson
Keyword(s):  
Corporate Governance ◽  
Best Practice ◽  
Stock Exchange ◽  
Listed Companies ◽  
Ownership Concentration ◽  
Board Structure ◽  
Content Type ◽  
Cross Listing ◽  
Price Earnings Ratio ◽  
Better Than

Purpose – This study aims to examine whether company characteristics determine the structure and composition of a company’s board. In particular, it investigates the three board-design choices that Australian-listed companies make in the context of Australian Stock Exchange (ASX) corporate governance principles (published in 2003) where they are allowed to depart from the recommended best-practice board structure if the departure better serves their unique board and governance requirements. Design/methodology/approach – A logistic regression is performed on a cross-section of data for 258 ASX-listed companies averaged over the years 2004 to 2007, using the company variables size, age, leverage, ownership concentration, profitability, liquidity, price-earnings ratio, market-to-book ratio and cross-listing. Findings – The study finds that size has a strong, statistically significant impact on all three principles. Ownership concentration, price-earnings ratio and age have statistically significant impacts on the likelihood of compliance with at least one principle but have no consistent influence over all. This finding supports the underlying philosophy of the ASX corporate governance principles that flexible guidelines serve companies better than inflexible rules. Originality/value – This study breaks new ground in empirically investigating the effect of company variables on compliance with the ASX’s Principles of 2003, which are new for Australia in requiring an “if not, why not” response from companies.

Does the “capstone” of the “comply or explain” system work in practice? Evidence from Athens Stock Exchange

2018 ◽  
Vol 18 (5) ◽  
pp. 911-930 ◽  
Author(s):  
Georgios L. Thanasas ◽  
Georgia Kontogeorga ◽  
George Asterios Drogalas
Keyword(s):  
Corporate Governance ◽  
Stock Exchange ◽  
Listed Companies ◽  
Context Analysis ◽  
Content Type ◽  
Developed Economies ◽  
Corporate Governance Code ◽  
Athens Stock Exchange ◽  
Mimetic Behavior ◽  
Comply Or Explain

PurposeIn recent years, the principle of the “comply or explain” approach has become the trend in corporate governance statements that are not fully compliant with national codes. This is because managers of companies deviating from corporate governance codes try to be lawful, providing reasonable explanations; thus, they reach an impasse, copying explanations from other companies, in a mimetic behavior. The purpose of this study is to investigate whether companies listed in Greek Stock exchange tend to imitate one each other thus to be legitimate in terms of the “comply or explain: approach”.Design/methodology/approachThis study focuses on the “comply or explain” approach in Greek listed companies, analyzing statements by 162 companies (80.2 per cent) listed on the Athens Stock Exchange (ASE), showing a total of 1,211 deviations from the national code. Therefore, the explanations were classified for analysis, grouping them into three main categories and investigating the degree of imitation.FindingsIn total, 96 companies deviating from the Code (56.3 per cent) provided explanations as to their legitimacy practices. Thus, the managers of these companies tried to explain their deviations from the national code in such a way that it could be considered that they tend to imitate each other, striving to be lawful.Research limitations/implicationsOwing to Greece’s ongoing economic crisis, many companies listed on the ASE in previous years have suspended the trading of their shares. An examination of previous years may have led to biased results, owing to the different samples of companies. Another limitation concerns the number of companies in the sample; although it covers almost 80 per cent of listed companies, the actual number of companies is not big enough.Practical implicationsThis study tries to investigate whether Greek listed companies comply with or deviate from the National Corporate Governance Code. For that purpose, context analysis was performed on 80.2 per cent of these companies (162 out of 202 companies) for the calendar year 2017. Most companies tried to explain their deviations from the Code in such a way that it could be considered that they tend to imitate each other.Social implicationsCompanies that deviate from the corporate governance code tend to imitate each other. This phenomenon occurs mainly in small companies, which, while striving to be lawful, even copy other companies’ phrases verbatim. This study reveals that managers of such companies care to provide an explanation for only deviations from the Code as a logical justification and not to capture the existing situation of their companies.Originality/valueThis study is the first to examine the mimetic behavior on corporate governance statements in Greece. Although the trend of imitation is a fact in developed economies, similar studies never took place on emerge economies. This study contributes to the literature by examining whether the trend of mimetic behavior exists in emerging economies as well.

Audit Committee Effectiveness Among Malaysian Listed Companies

2020 ◽  
Author(s):  
Shamsul Nahar Abdullah ◽  
Ku Nor Izah Ku Ismail
Keyword(s):  
Corporate Governance ◽  
Audit Committee ◽  
Stock Exchange ◽  
Listed Companies ◽  
The Other ◽  
Interactive Effects ◽  
Committee Chairman ◽  
Kuala Lumpur ◽  
Political Costs ◽  
Leadership Structure

This study investigates further the previous paper by Shamsul Nahar and Al-Murisi (1997) by examining the interactive effects of the variables in that paper and introducing other variables associated with corporate governance and political costs. The present study postulated that percentage of external directors on audit committee interacted with the presence of an accountant on audit committee and with the number of years an audit committee in existence, respectively, to influence audit committee effectiveness. The study also posited that the interaction of the presence of an accountant on audit committee and the number of years an audit committee in existence positively and significantly influenced audit committee effectiveness. Addition. ally, the roles of leadership structure, audit committee chairman, and a firm's size on audit committee effectiveness were also investigated. Using a multiple regression from a sample consisting the Kuala Lumpur Stock Exchange listed companies, results showed that only a firm's size significantly influenced audit committee effectiveness in the predicted direction. Other variables, on the other hand, did not show any significant influence on audit committee effectiveness.  

The evolution of the monitoring board in Japan: how the board performs monitoring function in Japanese corporate governance

2019 ◽  
Vol 19 (5) ◽  
pp. 999-1014
Author(s):  
Kohei Miyamoto
Keyword(s):  
Corporate Governance ◽  
Design Methodology ◽  
Stock Exchange ◽  
White Paper ◽  
Lifetime Employment ◽  
Content Type ◽  
Legal Reforms ◽  
Legal Evolution ◽  
Commercial Code ◽  
Governance Institutions

Purpose The purpose of this paper is to trace a legal evolution of the monitoring board and to reveal what brought the evolution and what is expected to emerge. The paper points to unique complementarities in Japanese corporate governance institutions and norms which will affect how the monitoring board performs its functions. Design/Methodology/Approach Analysis is based on texts on corporate governance legislations in Japan from the revision of Commercial Code in 1950 to the revision of Companies Act in 2014. Other sources include Tokyo Stock Exchange regulations, White Paper on Corporate Governance and other academic literatures on Japanese corporate governance. Findings Changes of non-legal institutions and norms in Japanese corporate governance necessitated legal reforms toward the monitoring board. Persisting institutions and norms, in particular lifetime employment, influences how the monitoring board performs its functions in Japan. Originality/Value This paper explains how the evolution of the monitoring board in Japan emerged and what will cause different expected functions of the monitoring board in Japan and other jurisdictions.

Relation between Chinese consumers’ ethical perceptions and purchase intentions

2019 ◽  
Vol 31 (3) ◽  
pp. 670-690 ◽  
Author(s):  
Muhammad Kashif Javed ◽  
Ma Degong ◽  
Talat Qadeer
Keyword(s):  
Structural Equation ◽  
Developing Economies ◽  
Purchase Intentions ◽  
Equation Modeling ◽  
Brand Trust ◽  
Ethical Perceptions ◽  
Chinese Consumers ◽  
Content Type ◽  
Highly Educated ◽  
Mediating Role

Purpose Most business-related studies on ethics focus on consumers in developed western economies but ignore developing economies. Therefore, to fill this void in the literature and address the concerns of prior studies, the purpose of this paper is to examine the ethical perceptions of Chinese consumers as an example of effective and efficient management of company/brand strategies in an economy experiencing rapid socioeconomic growth. Design/methodology/approach This study examines 328 Chinese consumers’ purchase intentions based on their ethical perceptions toward Apple and P&G through mediating (i.e. consumer–corporate identification (CCI) and brand trust) and moderating (i.e. consumer gender, age, education and residence) effects. Structural equation modeling is used to analyze the constructs and overall model. Findings The ethical perceptions of consumers translate into purchase intentions, both at the corporate and product brand levels. Similarly, a significant direct relationship between CCI and brand trust reveals that corporate-level ethical identification is a trivial matter to customers, although these perceptions do apply to product brands under a corporate umbrella. Furthermore, to identify target groups of Chinese consumers who are receptive to ethical appeals, moderating variables were found to be useful. Originality/value The results confirm that the mediating role of CCI is more influential in the context of Chinese consumers’ ethical perceptions, followed by brand trust. In relation to demographics, ethical perceptions affect CCI and brand trust more positively in females and highly educated consumers in China. Similarly, the relationship between consumers’ ethical perception and their trust in brand is revealed more influential in urban residents than they do in rural. This broadens the applications and contexts of this research model. The results provide managerial guidance on enhancing potential ethical perceptions.

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