Does mixed ownership improve the financial quality of Chinese listed companies?

2017 ◽  
Vol 8 (3) ◽  
pp. 367-388 ◽  
Author(s):  
Tingting Zhou ◽  
Juan LI
Keyword(s):  
Building Materials ◽  
Listed Companies ◽  
Accounting Fraud ◽  
Content Type ◽  
Operating Income ◽  
Controlling Shareholders ◽  
Financial Quality ◽  
Privatization Process ◽  
The Impact

Purpose The purpose of this paper is to explore financial quality problems, based on the dynamics of the ownership structure, in the privatization process to clarify the internal relation among the ownership’s attribution of the commercial mixed ownership company, the company’s performance and its financial relationships. This paper also examines the mixed ownership enterprise’s potential problems during the development process. Design/methodology/approach Adopting the single case study method, the authors selected the mixed ownership public company Hubei Sanxia New Building Materials Co., Ltd. (stock code: 600293) to explore, from a privatization perspective, the impact of mixed ownership on financial quality. Findings The study found that Sanxia experienced tight cash flow and heavy debt burdens due to the privatization and that its controlling shareholders used non-operating income to support Sanxia, thus characterizing the dual role of “the grabbing hand” and “the helping hand.” Sanxia’s privatization process highlighted the volatility of performance, the exception of monetary funds and the existence of accounting fraud rather than the prosperous development of the capital combination. Originality/value These findings provided case support that privatization negatively affects the financial quality of the company. Previous studies have indicated that there should be greater focus more on the issue that state-owned shares rebound during the process of privatization and that, with respect to commercial mixed ownership reform of state-owned enterprises, such reform must avoid the passive transfer of corporate control, ensure the fairness of the related transactions, prevent the loss of state-owned assets and preclude the controlling shareholders from seizing interests of listed companies.

Independent directors, ownership concentration and firm performance in listed companies

2017 ◽  
Vol 29 (2) ◽  
pp. 204-226 ◽  
Author(s):  
Thi Tuyet Mai Nguyen ◽  
Elaine Evans ◽  
Meiting Lu
Keyword(s):  
Corporate Governance ◽  
Firm Performance ◽  
Listed Companies ◽  
Ordinary Least Squares ◽  
Ownership Concentration ◽  
Independent Directors ◽  
Content Type ◽  
Controlling Shareholders ◽  
The Impact ◽  
The Relationship

Purpose The purpose of this paper is to investigate the impact of independent directors on firm performance in Vietnam and identify how different types of ownership structure and the presence of controlling shareholders influence the relationship. Design/methodology/approach For a sample of 217 non-financial Vietnam-listed companies during the period from 2010 to 2014, this study uses the ordinary least squares regressions to estimate the relationship between independent directors and firm performance. Two econometric techniques – the fixed effects estimation and the difference in difference estimation – are used to control for endogeneity. The results are also robust to the lag variable of independent directors. Findings The results reveal that independent directors have an overall negative effect on firm operating performance. This finding may be because of information asymmetry, expertise disadvantage and the dominance of ownership concentration that prevent independent directors from fulfilling their monitoring function in governance. The negative relationship between independent directors and firm performance is stronger in firms where the State is a controlling shareholder. Research limitations/implications Findings suggest that changes relating to independent directors, as a response to the new corporate governance code in 2012, do not have a positive effect on the relationship between corporate governance and firm performance. Further reform is required to improve internal control mechanisms and corporate governance systems in Vietnam. Originality/value This is the first study to provide a robust evidence on the relationship between independent directors and firm performance in Vietnam as well as to explore the impact of the type of controlling shareholders on the relationship.

Do disclosure and transparency affect bank’s financial performance?

2019 ◽  
Vol 19 (6) ◽  
pp. 1344-1361
Author(s):  
Isaiah Oino
Keyword(s):  
Risk Management ◽  
Corporate Governance ◽  
Financial Performance ◽  
Financial Institutions ◽  
Content Type ◽  
Loan Portfolios ◽  
Cent Level ◽  
Transparency And Disclosure ◽  
The Impact

Purpose The purpose of this paper is to examine the impact of transparency and disclosure on the financial performance of financial institutions. The emphasis is on assessing transparency and disclosure; auditing and compliance; risk management as indicators of corporate governance; and understanding how these parameters affect bank profitability, liquidity and the quality of loan portfolios. Design/methodology/approach A sample of 20 financial institutions was selected, with ten respondents from each, yielding a total sample size of 200. Principal component analysis (PCA), with inbuilt ability to check for composite reliability, was used to obtain composite indices for the corporate governance indicators as well as the indicators of financial performance, based on a set of questions framed for each institution. Findings The analysis demonstrates that greater disclosure and transparency, improved auditing and compliance and better risk management positively affect the financial performance of financial institutions. In terms of significance, the results show that as the level of disclosure and transparency in managerial affairs increases, the performance of financial institutions – as measured in terms of the quality of loan portfolios, liquidity and profitability – increases by 0.3046, with the effect being statistically significant at the 1 per cent level. Furthermore, as the level of auditing and the degree of compliance with banking regulations increases, the financial performance of banks improves by 0.3309. Research limitations/implications This paper did not consider time series because corporate governance does not change periodically. Practical implications This paper demonstrates the importance of disclosure and transparency in managerial affairs because the performance of financial institutions, as measured in terms of loan portfolios, liquidity and profitability, increases by 0.4 when transparency and disclosure improve, with this effect being statistically significant at the 1 per cent level. Originality/value The use of primary data in assessing the impact of corporate governance on financial performance, instead of secondary data, is the primary novelty of this study. Moreover, PCA is used to assess the weight of the various parameters.

scholarly journals Knowledge sharing in open source software communities: motivations and management

2015 ◽  
Vol 19 (4) ◽  
pp. 791-813 ◽  
Author(s):  
Zilia Iskoujina ◽  
Joanne Roberts
Keyword(s):  
Knowledge Sharing ◽  
Open Source ◽  
Open Source Software ◽  
Online Communities ◽  
Descriptive Analysis ◽  
Online Questionnaire ◽  
Content Type ◽  
The Individual ◽  
The Impact

Purpose – This paper aims to add to the understanding of knowledge sharing in online communities through an investigation of the relationship between individual participant’s motivations and management in open source software (OSS) communities. Drawing on a review of literature concerning knowledge sharing in organisations, the factors that motivate participants to share their knowledge in OSS communities, and the management of such communities, it is hypothesised that the quality of management influences the extent to which the motivations of members actually result in knowledge sharing. Design/methodology/approach – To test the hypothesis, quantitative data were collected through an online questionnaire survey of OSS web developers with the aim of gathering respondents’ opinions concerning knowledge sharing, motivations to share knowledge and satisfaction with the management of OSS projects. Factor analysis, descriptive analysis, correlation analysis and regression analysis were used to explore the survey data. Findings – The analysis of the data reveals that the individual participant’s satisfaction with the management of an OSS project is an important factor influencing the extent of their personal contribution to a community. Originality/value – Little attention has been devoted to understanding the impact of management in OSS communities. Focused on OSS developers specialising in web development, the findings of this paper offer an important original contribution to understanding the connections between individual members’ satisfaction with management and their motivations to contribute to an OSS project. The findings reveal that motivations to share knowledge in online communities are influenced by the quality of management. Consequently, the findings suggest that appropriate management can enhance knowledge sharing in OSS projects and online communities, and organisations more generally.

The effect of intangible assets on sustainable growth and firm value – Evidence on intellectual capital investment in companies listed on Bucharest Stock Exchange

Kybernetes ◽  
2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Catalin Ionita ◽  
Elena Dinu
Keyword(s):  
Growth Rate ◽  
Intellectual Capital ◽  
Firm Value ◽  
Intangible Assets ◽  
Stock Exchange ◽  
Listed Companies ◽  
Sustainable Growth ◽  
Content Type ◽  
Sustainable Growth Rate ◽  
The Impact

PurposeThe present study investigates the connection between company investments in intellectual capital (IC) and how they translate into financial value. The aim is to test the impact of intangible assets on the firm value and its sustainable growth.Design/methodology/approachThe research employs computation models to determine the sustainable growth rate (SGR) and the firm value (FV), and by using the ordinary least squares (OLS) model through a linear regression assesses the relationship between the dependent variables and expenditures on intangibles like R&D, IT programs and patents. A sample of 42 companies has been selected out of the 78 listed at Bucharest Stock Exchange (BSE), based on the appropriateness of the information disclosed in the financial reports for the period 2016–2019.FindingsThe results show that intangibles classified as innovative competences (R&D and Patents) do not have a positive impact on SGR and FV in listed companies from Romania. Moreover, R&D has a negative and significant effect on FV, while IT Programs have a positive and significant impact on FV, but not on the SGR. Variables categorised as economic competencies (Brands, Shares held in associates and jointly controlled entities) and firm structure-specific variables (Leverage, Firm Performance) seem to have a significant effect on SGR and FV. Shares held in associates and jointly controlled entities is the variable that can have the biggest impact when it comes to FV for companies listed at BSE.Research limitations/implicationsDue to non-disclosure of specific information by some companies, or lack of investments in intangibles the sample had to be reduced and does not cover all listed companies.Practical implicationsCompanies listed on the Regulated Market from the Bucharest Stock Exchange should maintain their scale of liabilities at a reasonable level when financing intangible assets in order to ensure corporate long-term and sustainable development. Also, these companies should maintain awareness about the importance of intangible assets and invest more in specific sub-components, in order to sustain competitive advantage. Recognizing the roles of intangibles, managers need to develop strategies to invest in profitable intangibles by reasonably allocating their limited resources, in order to achieve sustainable growth and increase company success.Originality/valueStudies concerning the relation between investments in intangibles and sustainable growth rate and firm value of listed Romanian companies are very scarce. This paper reveals new research, never before undertaken, concerning expenditures on intangibles by Romanian companies and the valuation of such investments on Bucharest Stock Exchange.

Shareholder risk-taking incentives in the presence of contingent capital

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Mahmoud Fatouh ◽  
Ayowande A. McCunn
Keyword(s):  
Risk Taking ◽  
Banking System ◽  
Capital Requirements ◽  
Content Type ◽  
Basic Model ◽  
Conversion Rates ◽  
A Minor ◽  
The Impact ◽  
Practical Implications

Purpose This paper aims to present a model of shareholders’ willingness to exert effort to reduce the likelihood of bank distress and the implications of the presence of contingent convertible (CoCo) bonds in the liabilities structure of a bank. Design/methodology/approach This study presents a basic model about the moral hazard surrounding shareholders willingness to exert effort that increases the likelihood of a bank’s success. This study uses a one-shot game and so do not capture the effects of repeated interactions. Findings Consistent with the existing literature, this study shows that the direction of the wealth transfer at the conversion of CoCo bonds determines their impact on shareholder risk-taking incentives. This study also finds that “anytime” CoCos (CoCo bonds trigger-able anytime at the discretion of managers) have a minor advantage over regular CoCo bonds, and that quality of capital requirements can reduce the risk-taking incentives of shareholders. Practical implications This study argues that shareholders can also use manager-specific CoCo bonds to reduce the riskiness of the bank activities. The issuance of such bonds can increase the resilience of individual banks and the whole banking system. Regulators can use restrictions on conversion rates and/or requirements on the quality of capital to address the impact of CoCo bonds issuance on risk-taking incentives. Originality/value To model the risk-taking incentives, authors generally modify the asset processes to introduce components that reflect asymmetric information between CoCo holders and shareholders and/or managers. This paper follows a simpler method similar to that of Holmström and Tirole (1998).

Board structure changes after accounting fraud: the case of Schneider Electric

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Benedicte Millet-Reyes ◽  
Nancy Uddin
Keyword(s):  
Corporate Governance ◽  
Internal Control ◽  
Multinational Corporation ◽  
Business Case ◽  
Annual Reports ◽  
Board Structure ◽  
Control Mechanisms ◽  
Accounting Fraud ◽  
Content Type ◽  
The Impact

Theoretical basis The impact of corporate governance on internal controls and quality of financial disclosures. Research methodology Analysis of a real financial fraud event for a non-US multinational corporation. The case relies on accessing and analyzing annual reports for the firm, both before and after the fraud. Additional information on industry governance characteristics are provided in the case itself so that students can compare the firm to the industry. Case overview/synopsis This business case is centered on the analysis of Schneider Electric, a French multinational corporation, which had to restate their financial statements in 2011 because of accounting fraud. Following this event, Schneider undertook major changes in their board structure to improve internal control mechanisms. This pedagogical business case familiarizes students with international differences in ownership and board structure and emphasizes potential corporate governance changes after financial statement fraud. Complexity academic level Managerial finance, corporate finance, international finance, auditing. This case is more appropriate for upper-level undergraduate and graduate courses.

Impact of social media usage on performance of construction businesses (CBs) in Abuja, Nigeria

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Luqman Oyekunle Oyewobi ◽  
Olufemi Seth Olorunyomi ◽  
Richard Ajayi Jimoh ◽  
James Olabode Bamidele Rotimi
Keyword(s):  
Social Media ◽  
Social Interaction ◽  
Structural Equation ◽  
Building Materials ◽  
Positive Impact ◽  
Research Approach ◽  
Cross Sectional ◽  
Content Type ◽  
Business Interest ◽  
The Impact

Purpose Many construction businesses are currently building and keeping social media pages for their enterprises to be visible to the public to improve their social interaction, promote business interest, build trust and relationships with their targeted audience on social media. The purpose of this study is to examine the impact of social mediausage on performance of construction businesses (CBs) in Abuja, Nigeria. Design/methodology/approach This study used a quantitative research approach by identifying constructs that reveal three aspects of organisation’s physiognomies that impact the process of espousing, implementing and using technological innovations in conducting businesses. Well-structured questionnaire was used to obtain data from 113 purposively sampled building materials’ merchant operating in Dei-Dei Market, Abuja, Nigeria. This study used partial least squares structural equation modelling technique to establish the relationship among the constructs. Findings The results of this study indicated that technology has significant relationship with social media adoption, whereas social media adoption has a very strong positive impact on organisation’s performance (P < 0.001) with respect to improved customer relations and services and enhanced information accessibility. Research limitations/implications This study has implications for CBs that wish to adopt social media to promote their businesses by presenting to them the opportunity to understand the impact of technology, environment and organisational potential in improving business performance. This study is cross-sectional in nature, and this calls for caution in interpreting the results. Originality/value This paper developed and tested a conceptual framework presented to understand the interrelationships amongst the constructs, which would be of great significance to business owners in developing their social interaction and promote business interest via social media. The outcome of this research is beneficial to researchers to further study how the different social media tools could help in influencing business decisions.

Impact of embodiment on attitude strength

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Sunaina Shrivastava ◽  
Gaurav Jain ◽  
JaeHwan Kwon ◽  
Dhananjay Nayakankuppam
Keyword(s):  
Undergraduate Students ◽  
Cognitive Process ◽  
Target Object ◽  
Attitude Strength ◽  
Quality Of Information ◽  
Content Type ◽  
Lab Experiments ◽  
Attitude Accessibility ◽  
The Impact

Purpose Traditionally, it has been held that strong attitudes are a result of the conscious cognitive process of elaboration where one engages in effortful issue-relevant thinking. The purpose of this study is to show that attitude strength can follow from processes not just limited to elaboration – as a function of certain embodied states. This study examines bodily manipulations that could alter perceptions about the quality of the information describing a target (e.g. notion of “hard/soft” evidence), and, find that such an embodiment leads one to have strong attitudes toward the target object. This study proposes an attitude-rehearsal-based mechanism to explain the phenomenon. Design/methodology/approach This study have relied on lab experiments as a methodology – undergraduate students and American residents served as participants. This study have conducted a pre-registered study as well. Findings In the work, the study shows that strong attitudes can result from processes not just limited to elaboration, as a function of certain embodied states. This paper examines bodily manipulations that could alter perceptions about the quality of information describing the target (e.g. notion of “hard vs soft”; “converging vs diverging” information), and, find that such an embodiment leads one to have strong attitudes toward the target. This study consistently observed that the bodily manipulations influence attitude accessibility, a direct and operational indicator of attitude strength. This study further validates an attitude-rehearsal-based mechanism to explain the observed phenomenon. Originality/value While much work has investigated the impact of embodiment on attitudes, little attention has been paid to whether, and, how embodied states can impact the “strength” of the attitude without impacting the attitude itself – to the knowledge, this paper is the first to document this. Moreover, traditionally, it has been held that strong attitudes are a result of the conscious cognitive process of elaboration where one engages in effortful issue-relevant thinking. This study however shows that attitude strength can follow from processes not just limited to elaboration – as a function of certain embodied states.

The model of HRM-trust-commitment relationships

2015 ◽  
Vol 115 (8) ◽  
pp. 1457-1480 ◽  
Author(s):  
Dagmara Lewicka ◽  
Katarzyna Krot
Keyword(s):  
Structural Equation ◽  
Affective Commitment ◽  
Content Type ◽  
Calculative Commitment ◽  
Starting Point ◽  
Research Findings ◽  
Organisational Trust ◽  
The Impact ◽  
The Relationship

Purpose – It is worth focusing on the examination of factors influencing the quality of the work environment. The purpose of this paper is to verify the influence of the HRM system and organisational trust on employee commitment. Design/methodology/approach – The survey was conducted in Poland among 370 employees in organisations from two sectors of the economy: services and industry. The verification of the theoretical model was performed based on structural equation modelling. Findings – Research findings made it possible to successfully verify the model of the relationship between the HRM system (practices, process), organisational trust and commitment. The starting point for trust in an organisation followed by commitment is the HRM system. It seems that the impact of the HRM process on creating organisational trust is higher. Research findings have also confirmed a relationship between each type of organisational trust and calculative commitment based on benefits, which is a strong determinant of affective commitment. Organisational trust is, therefore, an intermediary factor because the organisation must build trust in employees first before they become affectively committed. Originality/value – Current studies have not examined the issue of a mutual relationship between three constructs: perceived HRM practices and process, organisational trust and commitment. What is more, previous research was confined to the constructs analysed holistically without considering their complexity (different types of trust and commitment). In addition, the authors attempted to enrich Allen and Mayer’s (1991) model with a new aspect of the commitment – calculative, which is linked to the benefits received by employees. The authors also identified the mediating influence of the trust and calculative commitment onto the affective commitment.

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