Export behavior and corporate governance

2020 ◽  
Vol 30 (1) ◽  
pp. 43-76 ◽  
Author(s):  
Oliver Lukason ◽  
Tiia Vissak
Keyword(s):  
Corporate Governance ◽  
Ordinary Least Squares ◽  
Export Market ◽  
Board Members ◽  
Large Set ◽  
Least Squares Regression ◽  
Export Share ◽  
Holistic View ◽  
Content Type ◽  
Export Behavior

Purpose This paper aims to study how firms’ export behavior is associated with their corporate governance. Design/methodology/approach This study uses whole population data of Estonian small and medium-sized enterprises: 9,530 exporters and 73,619 non-exporters. Several theory-driven corporate governance variables and exporting variables (based on previous studies) are used. Binary logistic regression is applied to study how exporters’ corporate governance differs from that of non-exporters. Eight additional continuous dependent variables are used to portray exporters’ internationalization with ordinary least squares regression. The robustness of the obtained base results is checked for younger/older and smaller/larger firms. Findings Having female board members did not lead to a higher likelihood of export activities. Experience – tenure’s length, board members’ age and other board memberships – provided mixed results. Having a larger board was associated with a higher export propensity and larger exports but a lower export share. A larger share of a chief executive officer’s shareholding was associated with lower export propensity, exporting less overall and activities on a smaller number of markets. The presence of a majority owner was associated with larger export share and export turnover, but more focus on the main export market. Firm age and size affected the results. Originality/value Previous studies about the interconnection of corporate governance and exporting have relied on varied theoretical explanations and limited sets of variables. This paper provides an extensive insight by using corporate governance variables emergent from various theoretical explanations accompanied by a large set of dependent exporting variables. The latter enables obtaining a more holistic view of the interconnection between the two phenomena.

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.

scholarly journals The impact of AAOIFI governance disclosure on Islamic banks performance

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Tawida Elgattani ◽  
Khaled Hussainey
Keyword(s):  
Corporate Governance ◽  
Regression Model ◽  
Financial Institution ◽  
Ordinary Least Squares ◽  
Annual Reports ◽  
Islamic Banks ◽  
Least Squares Regression ◽  
Content Type ◽  
The Impact ◽  
Governance Disclosure

Purpose This study aims to investigate the impact of the accounting and auditing organisation for Islamic financial institution (AAOIFI) governance disclosure on the performance of Islamic banks (IBs). Design/methodology/approach The ordinary least squares regression model was used to test the impact of AAOIFI governance disclosure on the performance of 126 IBs from 8 countries that mandatorily adopt the AAOIFI standards for three years (2013–2015). In this regression model, return on asset (ROA) and return on equity (ROE) are the dependent variables, while AAOIFI governance disclosure is the independent variable. Corporate governance mechanisms, firm characteristics, year dummy and country dummy are used as control variables. Findings This paper found an insignificant relationship between AAOIFI governance disclosure and IBs performance. Research limitations/implications This study highlighted the implication that the current research may help IBs and encourage them to disclose more information in annual reports, especially those related to AAOIFI governance standards because following good corporate governance leads to good financial performance. The major limitation of the paper is that it is only focussed on two measurements of bank performance – ROA and ROE; it would be good to use other firm performance measures, such as profit margin. Originality/value This study provides new empirical evidence on the impact of AAOIFI governance disclosure on IBs performance.

Ownership structure and audit committee effectiveness: evidence from top GCC capitalized firms

2019 ◽  
Vol 12 (3) ◽  
pp. 407-425 ◽  
Author(s):  
Mahfoudh Abdulkarem Al-Musali ◽  
Mohammed Helmi Qeshta ◽  
Mohamed Ali Al-Attafi ◽  
Abood Mohammad Al-Ebel
Keyword(s):  
Corporate Governance ◽  
Audit Committee ◽  
Ordinary Least Squares ◽  
Annual Reports ◽  
Least Squares Regression ◽  
Governance Mechanisms ◽  
Content Type ◽  
Corporate Governance Mechanisms ◽  
The Relationship ◽  
Ownership Types

PurposeThe purpose of this study is to report on the level of audit committee (AC) effectiveness on the top capitalized firms in GCC countries and to empirically investigate the hypothesized influence of ownership types on the level of AC effectiveness.Design/methodology/approachThe empirical data were drawn from annual reports of 119 top listed firms in Gulf Co-operation Council (GCC) nations at the end of 2011. Ordinary least squares regression analysis was constructed to examine the relationships between ownership types and the level of AC effectiveness.FindingsThe findings revealed that family, government and institutional ownership, in addition to board independence, all have significant positive association with AC effectiveness, and they serve as a complement to AC effectiveness.Research limitations/implicationsThe findings of the study are important for policy makers and regulators as they could use them to understand the relationship between different corporate governance mechanisms and formulating best strategies that would help them to improve and adopt an optimal governance system constituted from interacting governance mechanisms.Originality/valueThis study is one of few that have examined the interaction between different corporate governance mechanisms. It provides insights about the relationship between AC effectiveness and other governance mechanisms in the GCC context.

Under- vs over-investment: hotel firms’ value around acquisitions

2017 ◽  
Vol 29 (8) ◽  
pp. 2050-2069 ◽  
Author(s):  
Tarik Dogru
Keyword(s):  
Corporate Governance ◽  
Firm Value ◽  
Financial Constraints ◽  
Organizational Structures ◽  
Ordinary Least Squares ◽  
Governance Mechanism ◽  
Least Squares Regression ◽  
Governance Mechanisms ◽  
Content Type ◽  
Corporate Governance Mechanisms

Purpose The purpose of this study is to analyze the extent to which under- and over-investment problems affect hotel firms’ value around the time when acquisitions are announced. Design/methodology/approach Hotel firms are classified based on their financial constraints (under-investment), corporate governance mechanisms (over-investment) and organizational structures. Multivariate analyses are conducted utilizing the panel ordinary least squares regression to examine the effects of financial constraints, corporate governance mechanisms and organizational structures on acquisition returns. Findings The results show that financial constraints have a larger effect on the firm value compared to the effect of corporate governance. Also, acquisitions are viewed as over-investments in poorly governed, franchising and hotel-real estate investment trust (REIT) firms. Research limitations/implications The analyses are limited to gains from acquisitions in the hotel industry. Therefore, future studies may examine the effects of capital expenditures and cash holdings on hotel firm value. Practical implications Acquisitions could help financially constrained firms reduce informational asymmetries. Firms could expand through franchising when they are financially constrained. However, franchising firms should take restrictive actions to control managers from making acquisitions. The hotel-REIT organizational form does not seem to cause under-investment problems, and it functions as an additional corporate governance mechanism. Originality/value In addition to the C-corporation organizational structure, hotel firms extensively adopt REIT and expand through franchising, which might affect under- and over-investment problems. Nonetheless, little is known about whether capital investments create or reduce value for hotel firms. This study helps to explain how financial constraints, corporate governance mechanisms and organizational structures affect hotel firms’ value.

Environmental disclosure quality and risk: the moderating effect of corporate governance

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Zabihollah Rezaee ◽  
Mohammad Alipour ◽  
Omid Faraji ◽  
Mehrdad Ghanbari ◽  
Babak Jamshidinavid
Keyword(s):  
Corporate Governance ◽  
Fixed Effects ◽  
Social Performance ◽  
Ordinary Least Squares ◽  
Least Squares Regression ◽  
Firm Risk ◽  
Disclosure Quality ◽  
Environmental Disclosure ◽  
Content Type ◽  
The Relationship

Purpose The purpose of this article is to investigate the relationship between environmental disclosure quality (EDQ) and risk and to further examine whether corporate governance (CG) practices moderate this relationship. Design/methodology/approach This study uses a set of unique, hand collected data (from 2011 to 2016) to measure EDQ for a sample of 762 firm-years Iranian listed companies. Ordinary least squares regression analysis is performed in testing hypotheses after controlling for a variety of firm, industry and year effects. Moreover, several analyses are performed to establish the robustness of the findings. Findings The results indicate a negative association between EDQ and firm risk. While board independence moderates this relationship, other CG practices such as CEO duality and board size do not show any effects on the relationship between EDQ and risk. The results remain robust after performing sensitivity tests and under various specifications, including the fixed-effects panel data and Heckman two-stage regressions. Research limitations/implications Results are from a sample of firms from one country. Practical implications The results have implications for policymakers, legislators and corporate executives, as environmental initiatives are gaining more attention worldwide. Social implications Sustainability initiatives in the areas of environmental and social performance and disclosure are gaining global attention. This study addresses the link between firm risk and EDQ. Originality/value This study contributes to the literature by shedding light on the relationship between corporate risk-taking and EDQ in the context of a developing economy.

The relationship between ownership structure, capital structure and corporate governance practices

2014 ◽  
Vol 10 (4) ◽  
pp. 511-536 ◽  
Author(s):  
Krishna Reddy ◽  
Stuart Locke
Keyword(s):  
Corporate Governance ◽  
New Zealand ◽  
Capital Structure ◽  
Ownership Structure ◽  
Agency Costs ◽  
Ordinary Least Squares ◽  
Agency Cost ◽  
Least Squares Regression ◽  
Content Type ◽  
Governance Practices

Purpose – The purpose of this paper is to investigate the nature of corporate governance practised by co-operatives and mutual societies in New Zealand and whether there is any relationship between co-operatives’ ownership structure, capital structure and agency costs. The study also explores whether the capital structure and the ownership structure changed during the period 2005-2011. Design/methodology/approach – Panel data for the period 2005-2011 are analysed using ordinary least squares regression and the Tobit model regression. The authors have used operating expense to sales, asset utilisation and ROA as the dependent variables. Findings – The findings indicate that an increase in independent directors, board member experience and size (measured by total annual sales) reduces agency costs in co-operatives and mutuals in New Zealand. Also, borrowing from members rather than banks reduces agency cost and increases profitability in co-operatives and mutuals. Research limitations/implications – Caution should be exercised when generalising the findings of the study as it is restricted to New Zealand environment and the sample size used is relatively small. Practical implications – This study offers insights for policy makers internationally who are interested in adopting similar corporate governance practices in their own countries. Within New Zealand, the corporate governance debate associated with co-operatives and mutual societies will be better informed as a direct consequence of this research. Originality/value – This is the first study that extends the research undertaken by Ang et al. (2000) and Singh and Davidson (2003) to the cooperative and mutual business model in New Zealand.

Does sin matter in corporate governance issues in the United States

2018 ◽  
Vol 11 (3) ◽  
pp. 449-469
Author(s):  
Hanene Ezzine ◽  
Bernard Olivero
Keyword(s):  
Corporate Governance ◽  
Social Norms ◽  
Financial Incentives ◽  
Empirical Support ◽  
The United States ◽  
Ordinary Least Squares ◽  
Least Squares Regression ◽  
Content Type ◽  
Governance Risk ◽  
Sin Stocks

PurposeThe authors provide evidence for the effects of social norms on corporate governance risk by studying “sin” stocks publicly traded companies involved in producing alcohol, firearms, biotechnology, gambling, military, nuclear power and tobacco. There is a societal norm against funding operations that promote vice and expropriation by controlling shareholders.Design/methodology/approachThe sample is representative of S&P 500 firms in 2014. The authors use Datastream to obtain a sample of sin stocks. The authors’ descriptive analysis is completed by four variations of the basic ordinary least squares regression model according to dependent variable corporate governance risk score.FindingsThe authors find that non-financial incentives alone do not explain corporate governance risk. The authors provide strong empirical support for an alignment of financial and non-financial incentives. The authors show that when sin firm’s current performance is good, suggesting that the market holds a positive belief in firm’s future profitability, managers will likely have more incentive to expropriate shareholders.Research limitations/implicationsBelonging of firm to a sin industry does not reflect the acceptance level of social norms. The evolution of social norms towards sin stocks overcomes the drawback of assuming a constant social norms level over time. Therefore, researchers are encouraged to use the changes in consumption of sin products as a proxy for the evolution of social norms and examine does sin matter in corporate governance issue in other countries.Practical implicationsWell-planned and well-managed philanthropy sin industries to creating education programmes for the disadvantaged to protecting the environment, in the name of corporate social responsibility has become a necessary ingredient in virtually every large corporation’s business plan.Originality/valueThis paper fulfils an identified need to study does sin matter issue in corporate governance issue.

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.

Estimating defaults in organized security lending markets

2016 ◽  
Vol 24 (3) ◽  
pp. 343-362
Author(s):  
Latif Cem Osken ◽  
Ceylan Onay ◽  
Gözde Unal
Keyword(s):  
Credit Risk ◽  
Stock Returns ◽  
Stock Price ◽  
Price Volatility ◽  
Equity Market ◽  
Ordinary Least Squares ◽  
Least Squares Regression ◽  
Content Type ◽  
Central Counterparties ◽  
Risk Determinants

Purpose This paper aims to analyze the dynamics of the security lending process and lending markets to identify the market-wide variables reflecting the characteristics of the stock borrowed and to measure the credit risk arising from lending contracts. Design/methodology/approach Using the data provided by Istanbul Settlement and Custody Bank on the equity lending contracts of Securities Lending and Borrowing Market between 2010 and 2012 and the data provided by Borsa Istanbul on Equity Market transactions for the same timeframe, this paper analyzes whether stock price volatility, stock returns, return per unit amount of risk and relative liquidity of lending market and equity market affect the defaults of lending contracts by using both linear regression and ordinary least squares regression for robustness and proxying the concepts of relative liquidity, volatility and return constructs by more than variable to correlate findings. Findings The results illustrate a statistically significant relationship between volatility and the default state of the lending contracts but fail to establish a connection between default states and stock returns or relative liquidity of markets. Research limitations/implications With the increasing pressure for clearing security lending contracts in central counterparties, it is imperative for both central counterparties and regulators to be able to precisely measure the risk exposure due to security lending transactions. The results gained from a limited set of lending transactions merit further studies to identify non-borrower and non-systemic credit risk determinants. Originality/value This is the first study to analyze the non-borrower and non-systemic credit risk determinants in security lending markets.

Personality, risk tolerance and social network use: an exploratory study

2016 ◽  
Vol 42 (6) ◽  
pp. 536-552 ◽  
Author(s):  
Shaista Wasiuzzaman ◽  
Siavash Edalat
Keyword(s):  
Social Networks ◽  
Social Network ◽  
Online Social Networks ◽  
Financial Risk ◽  
Ordinary Least Squares ◽  
Risk Tolerance ◽  
Network Activity ◽  
Least Squares Regression ◽  
Content Type ◽  
Financial Risk Tolerance

Purpose – The vast amount of information available via online social networks (OSN) makes it a very good avenue for understanding human behavior. One of the human characteristics of interest to financial practitioners is an individual’s financial risk tolerance. The purpose of this paper is to look at the relationship between an individual’s OSN behavior and his/her financial risk tolerance. Design/methodology/approach – The study uses data collected from a sample of 220 university students and the backward variables selection ordinary least squares regression analysis technique to achieve its objective. Findings – The results of the study find that the frequency of logging on to social network sites indicates an individual who has higher financial risk tolerance. Additionally, the increasing use of social networks for social connection is found to be associated with lower financial risk tolerance. The results are mostly consistent when the sample is split based on prior financial knowledge. Originality/value – To the authors’ knowledge this is the first study which documents the possibility of understanding an individual’s financial risk tolerance via his/her social network activity. This provides investment/financial consultants with more avenues for gathering information in order to understand their current or potential clients hence providing better services.

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