The Relation Between Earnings Quality and Cost of Equity and the Role of Ownership Concentration: Evidence from Italy

2021 ◽  
pp. 2150010
Author(s):  
Claudia Frisenna ◽  
Daniele Greco ◽  
Davide Rizzotti
Keyword(s):  
Earnings Quality ◽  
Negative Relationship ◽  
Ownership Concentration ◽  
Cost Of Equity ◽  
Quality Cost ◽  
Listed Firms ◽  
Concentrated Ownership ◽  
Italian Context ◽  
The Relationship

This study aims to replicate the analysis of the relationship between earnings quality and cost of equity in the Italian context, a context characterized by high ownership concentration and weak investor protection dominated by the type II agency problem. We hypothesize a different intensity of the earnings quality–cost of equity relation between concentrated-held firms and dispersed-held ones. The analysis is based on a sample of 774 firm-year observations from 128 Italian nonfinancial listed firms, from 2011 to 2017. Empirical results confirm the existence of a negative relationship between earnings quality and cost of equity. Moreover, findings show that in Italy, this relation is stronger for firms with concentrated ownership and weaker for firms with more dispersed ownership. Consistent with our hypothesis, this finding suggests that ownership structure affects the sensitivity of the earnings quality–cost of equity relationship.

scholarly journals The moderating role of family ownership on the relationship between ownership concentration and comply-or-explain disclosure: An analysis on Italian listed companies

2019 ◽  
Vol 15 (3) ◽  
pp. 27-42
Author(s):  
Federico Alvino ◽  
Luigi Lepore ◽  
Sabrina Pisano ◽  
Gabriella D'Amore
Keyword(s):  
Ownership Structure ◽  
Boards Of Directors ◽  
Negative Relationship ◽  
Listed Companies ◽  
Ownership Concentration ◽  
Family Ownership ◽  
The Relationship ◽  
Moderating Role ◽  
Comply Or Explain

The aim of the paper is to investigate the relationship between ownership concentration and the degree of comply-or-explain disclosure regarding the composition and functioning of boards of directors, also considering the moderating role played by family ownership. The study is conducted on a sample of 227 Italian non-financial listed companies. The results reveal a negative relationship between ownership concentration and the degree of comply-or-explain disclosure. Moreover, this relationship is stronger in companies having a family firm as a dominant shareholder. The paper contributes to previous studies on the degree of adherence to corporate governance code by investigating both the comply aspect and the explanations provided in cases of non-compliance. Moreover, the study contributes to previous research on the relationship between ownership structure and disclosure by considering the moderating role played by shareholder identity.

scholarly journals Differentiation Strategy, CSR, And Real Activities Earnings Management: Evidence From Korea

2017 ◽  
Vol 33 (4) ◽  
pp. 667 ◽  
Author(s):  
Sungbin Chun ◽  
Eunho Cho
Keyword(s):  
Earnings Management ◽  
Negative Relationship ◽  
Synergy Effect ◽  
Listed Firms ◽  
Differentiation Strategy ◽  
Sensitivity Tests ◽  
Corporate Social ◽  
The Relationship ◽  
Moderating Role

We empirically investigate whether a differentiation strategy constrains real activities earnings management (RAEM). Further, considering corporate social responsibility (CSR) activities are a popular tool of differentiation strategy, we examine whether interactive synergy between CSR activities and the differentiation strategy strengthens the negative relationship between differentiation strategy and RAEM. Using a sample of 659 firm-year observations of Korean manufacturing listed firms during 2005-2010, we find that differentiation strategy is negatively associated with RAEM, suggesting that firms pursuing a differentiation strategy are likely to refrain from managing earnings using RAEM that goes against their strategy. We also observe that interactive synergy between differentiation and CSR strengthens the negative relationship between differentiation strategy and RAEM, implying that synergy effect between CSR and differentiation strategy even more constrains RAEM that is in conflict with both CSR and differentiation strategy. These findings are robust after we perform sensitivity tests. This study contributes to the literature by providing the first evidence on the relationship between differentiation strategy and RAEM and the moderating role of CSR activities on the relationship.

Women on boards of directors: the moderation role of female labour force participation

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Reem Hamdan ◽  
Allam Hamdan ◽  
Bahaaeddin Alareeni ◽  
Osama F. Atayah ◽  
Layla Faisal Alhalwachi
Keyword(s):  
Firm Size ◽  
Labour Force ◽  
Ownership Concentration ◽  
Firm Level ◽  
Content Type ◽  
Listed Firms ◽  
Gcc Countries ◽  
Women On Boards ◽  
The Relationship

Purpose This study aims to investigate the moderation role of the percentage of women in the country labour force in the relationship between firm-level governance factors (board size, institutional ownership, ownership concentration, board independence, performance, firm size, firm’s risk and sector) and women on boards (WOBs) in publicly listed firms in Gulf Cooperation Council (GCC) countries. Design/methodology/approach The study relied on a sample of 436 publicly listed firms in 2018 in six GCC countries (Bahrain, Kuwait, Saudi Arabia, Oman, Qatar and the United Arab Emirates). Findings The study concluded that the percentage of women in the country’s labour force has a moderation role in the relationship between board size and WOB, as well as firm market performance and WOBs. However, ownership concentration, firm size, firm risk and firm sector do not affect the percentage of WOB; consequently, the percentage of women in the country’s labour force did not have a moderation role in the relationship between these variables and the percentage of WOBs. Originality/value The study incorporates an institutional level variable which is the percentage of women in the country’s labour force in a firm-level relationship mostly understood by agency theory.

scholarly journals Linkages between ownership concentration and financial ratio communication

2010 ◽  
Vol 8 (1) ◽  
pp. 76-86
Author(s):  
Norhani Aripin ◽  
Greg Tower ◽  
Grantley Taylor
Keyword(s):  
Financial Services ◽  
Voluntary Disclosure ◽  
Theoretical Background ◽  
Ownership Concentration ◽  
Annual Reports ◽  
Financial Ratio ◽  
Listed Firms ◽  
Concentrated Ownership ◽  
Audit Firms ◽  
The Relationship

This study examines the relationship between ownership concentration and the extent of financial ratio disclosures (EFRD) in the 2007 annual reports of Australian listed firms. Using agency theory as theoretical background, it is suggested that firms with more concentrated ownership structures are less likely to provide voluntary disclosure of financial ratios information. The univariate tests demonstrate that profitable firms, those firms audited by Big4 auditors and firms belonging to financial services industry communicate more financial ratio information. OLS regressions show that more dispersed shareholding firms‟ are significantly associated with EFRD. Profitable and larger firms audited by independent and Big4 audit firms additionally reported more extensive financial ratio information.

scholarly journals Earning quality in listed firms: How much an active family governance is desirable?

2012 ◽  
Vol 10 (1) ◽  
pp. 681-691 ◽  
Author(s):  
Riccardo Tiscini ◽  
Francesca di Donato
Keyword(s):  
Family Involvement ◽  
Family Firms ◽  
Earnings Quality ◽  
Listed Firms ◽  
Family Governance ◽  
The Family ◽  
Governance Practices ◽  
Earning Quality ◽  
Italian Context ◽  
The Relationship

The study investigates the relationship between family involvement in the governance of Italian listed companies and earnings quality (EQ). Family firms set incentives to extract private benefits (‘entrenchment’ effect), but, they also contribute to higher alignment between owners and managers (‘alignment’ effect). The literature shows mixed results about the relationship between EQ and family firms. We argue that family involvement in the governance affects EQ. The empirical evidence shows that in the Italian context, there is higher EQ in case of higher family involvement in the board, but only if the CEO is not belonging to the controlling family. On the contrary, in case of a family CEO, the higher family involvement in the board increases his entrenchment, reducing EQ. The results are valuable because we find that EQ in family firms is affected both by family ownership and by the attitude of the family toward governance practices.

scholarly journals The impact of board independence and foreign ownership on financial and social performance of firms: evidence from the UAE

2020 ◽  
Vol 21 (2) ◽  
pp. 201-229 ◽  
Author(s):  
Bakr Al-Gamrh ◽  
Redhwan Al-Dhamari ◽  
Akanksha Jalan ◽  
Asghar Afshar Jahanshahi
Keyword(s):  
Social Performance ◽  
Negative Relationship ◽  
Foreign Ownership ◽  
Board Independence ◽  
Foreign Investors ◽  
Content Type ◽  
Listed Firms ◽  
The Impact ◽  
The Relationship

PurposeThis study examines the impact of two different types of foreign ownership—by Arab and non-Arab investors on firms' financial and social performance. It then goes on to investigate how the degree of board independence affects the aforementioned relationship between these two types of foreign investors on firm performance.Design/methodology/approachThe sample for the study is a panel of all listed firms in the Dubai Financial Market (DFM) and the Abu Dhabi Securities exchange (ADX) from 2008 to 2012.FindingsResults indicate that while Arab foreign ownership affects firms' financial and social performance negatively, non-Arab foreign ownership does so, positively. Further tests indicate that board independence weakens the negative relationship between firm financial and social performance with foreign Arab ownership and deteriorate the relationship between firm financial and social performance and non-Arab foreign ownership.Research limitations/implicationsFuture studies may extend the coverage of the study by including other countries in the region and other identities of the foreign investors.Practical implicationsThis study may help policy makers in the UAE to improve the implementation and enforcement of existing regulations concerning corporate social responsibility (CSR) and board independence. It also highlights the need to look into the monitoring role of independent board members.Originality/valueThis is the first study to examine the role of board independence on the relationship between foreign ownership and firm's financial and social performance. To the best of our knowledge, this is the first paper that attempts to enrich the understanding of foreign ownership by classifying it into Arab versus non-Arab.

The Teacher Behavior Checklist: The Mediation Role of Teacher Behaviors in the Relationship Between the Students’ Importance of Teacher Behaviors and Students’ Effort

2020 ◽  
pp. 009862832097989
Author(s):  
Michael T. Geier
Keyword(s):  
Critical Thinking ◽  
Negative Relationship ◽  
Teacher Behavior ◽  
Teacher Behaviors ◽  
Stepwise Multiple Linear Regression ◽  
Cross Sectional Survey ◽  
Cross Sectional ◽  
The Relationship ◽  
Teaching Implications

Background: Previous research suggests a relationship between teacher behaviors and students’ effort. However, it is not clear what role the students’ expectations (i.e., importance of teacher behaviors) play in this relationship. Objective: Utilizing the teacher behavior checklist, this study sought to investigate whether teacher behaviors mediate the relationship between the importance students set on teacher behaviors and students’ effort. Further, the study explored which specific behaviors influence students’ effort. Method: Cross-sectional survey data were analyzed ( N = 159) using mediation analysis and stepwise multiple linear regression. Results: There was evidence that teacher behaviors mediate the relationship between the importance students set on teacher behaviors and students’ effort. Four of the 28 teacher behaviors had a significant relationship to students’ effort: creative and interesting, enthusiastic about teaching, happy/positive/humorous, and promotes critical thinking. Conclusion: Knowing students’ expectations (i.e., the importance of teacher behaviors) is essential to increasing students’ effort. Teaching Implications: Happy/positive/humorous had a negative relationship with students’ effort, while creative and interesting, enthusiastic about teaching, and promotes critical thinking showed a positive relationship with students’ effort.

Ownership as a determinant of chairperson activity: a study of Nordic listed companies

2015 ◽  
Vol 7 (4) ◽  
pp. 412-428
Author(s):  
Tor Brunzell ◽  
Jarkko Peltomäki
Keyword(s):  
Working Hours ◽  
Chief Executive ◽  
Ownership Concentration ◽  
Content Type ◽  
Listed Firms ◽  
Concentrated Ownership ◽  
The Board Of Directors ◽  
The Impact ◽  
The Empirical Analysis ◽  
A Company

Purpose – The purpose of this study is to explicitly focus on the roles of ownership concentration, ownership by the board, the chief executive officer (CEO) and the chairperson in the involvement and capabilities of chairpersons and other governors in their work. Design/methodology/approach – In this study, the authors investigate the impact of the concentration of ownership, the ownership of the board, the CEO and the chairperson on the chairperson’s activity when the roles of the chairperson and the CEO are separated The empirical analysis of this study is based on a survey sent to Nordic listed firms. Findings – The results show that the ownership characteristics of a company are important in determining the chairperson’s working hours, the chairperson’s communication with the CEO and the performance of governance activity. In addition, the authors found that while the ownership of the chairperson and the board of directors and ownership concentration improve governance activity, CEO ownership may undermine governance activity. Research limitations/implications – The primary implication of the study is that both ownership by internal governors and ownership concentration play an important role in determining the involvement of internal corporate governors. Originality/value – The study provides unique evidence that ownership by the chairperson, concentrated ownership and ownership by the board can potentially mitigate the costs of separating the roles of the chairperson and the CEO.

scholarly journals Leader–Follower Congruence in Work Engagement and Leader–Member Exchange: The Moderating Role of Conscientiousness of Followers

2021 ◽  
Vol 12 ◽  
Author(s):  
Yanhua Ye ◽  
Ziwen Wang ◽  
Xiaowei Lu
Keyword(s):  
Work Engagement ◽  
Negative Relationship ◽  
Leader Member Exchange ◽  
Future Directions ◽  
Lmx Theory ◽  
Person Environment Fit ◽  
Work Tasks ◽  
Member Exchange ◽  
The Relationship

Extant research has investigated the relationship between work engagement and various outcomes, such as job performance and organizational commitment, neglecting the effect of work engagement on social relationships at work. Drawing upon person-environment fit theory and LMX theory, the present study aims to examine the effect of (in)congruence between leader and follower work engagement on leader–member exchange (LMX) and the moderating effect of conscientiousness. About 273 employees and 72 leaders participated in this study and completed the measurements of work engagement, conscientiousness, and LMX at two time points. Using cross-level polynomial regressions, we found that, compared with incongruent work engagement, employees perceived high levels of LMX quality when their work engagement was aligned with that of their leaders. Regarding the congruence, the employees reported higher levels of LMX when congruence in work engagement was at higher rather than lower levels. Regarding the incongruence, when the employees engaged less in their work tasks than their leaders, they were more likely to experience lower LMX. Moreover, the negative relationship between incongruence in leader and follower work engagement and LMX was mitigated when followers were more conscientious. All our hypotheses were supported. Both theoretical and practical implications for work engagement as well as future directions are discussed.

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