Internal governance mechanism and default probability: evidence from US public firms

2014 ◽  
Vol 5 (1/2) ◽  
pp. 83 ◽  
Author(s):  
Samira Lehlou ◽  
Imen Tebourbi ◽  
Lobna Bouslimi
Keyword(s):  
Default Probability ◽  
Governance Mechanism ◽  
Internal Governance ◽  
Public Firms

State ownership and firm profitability in emerging markets

2018 ◽  
Vol 31 (2) ◽  
pp. 167-183 ◽  
Author(s):  
Mouna Ben Rejeb Attia ◽  
Naima Lassoued ◽  
Mohamed Chouikha
Keyword(s):  
Developing Countries ◽  
Explanatory Power ◽  
Simultaneous Equation ◽  
State Ownership ◽  
Governance System ◽  
Internal Governance ◽  
Content Type ◽  
Public Firms ◽  
Equation Analysis ◽  
Firm Profitability

Purpose The purpose of this paper is to examine the relationship between state ownership and firm profitability in developing countries by considering the endogenous nature of state ownership and firm profitability. Design/methodology/approach A simultaneous equation analysis is applied to study 232 Tunisian firms over the 2001-2013 period. This analysis is compared with OLS estimates to show its power in terms of an endogenous setting and its potential to improve estimation. Findings Unlike the OLS estimates that show a non-significant relationship between state ownership and firm profitability, the simultaneous equation analysis reveals a non-symmetrical concave relationship. Specifically, state ownership affects positively firm profitability when it is relatively small and negatively when state ownership dominates. Specification test indicates that both state ownership and firm profitability are endogenous. Furthermore, the simultaneous model’s explanatory power exceeds that of OLS estimates and proves to be a suitable estimation technique. Practical implications Taking into account public firms’ categorization, the authors implicitly examine the effect of privatization and corporatization on firm profitability. The findings imply that privatization is not the only solution to the operational problems of public firms, but an internal governance system restructuring can also be favorable for these firms. Originality/value In addition to focusing on a new database of developing countries, the case of Tunisian firms, the main empirical analysis is conducted by considering the endogeneity issue. Thus, the findings improve understanding of the role played by state ownership and suggest that a partial state control appears to be beneficial to firm profitability.

scholarly journals Study on Relation between Equity Structure and Performance of Listed Companies - Evidence for Building Industry in A Share Market

2017 ◽  
Vol 9 (7) ◽  
pp. 114
Author(s):  
Xinyuan Zhang ◽  
Zhixiu Guo ◽  
Xiaorui Feng ◽  
Yan He
Keyword(s):  
Listed Companies ◽  
Building Industry ◽  
Company Performance ◽  
Governance Mechanism ◽  
Equity Structure ◽  
Internal Governance ◽  
Return On Equity ◽  
Chinese Listed Companies ◽  
Small Investors ◽  
And Performance

The equity structure is the basis for corporate governance, and the decisive factor for performance of listed companies. Considering the return on equity as the measure index of company performance, the paper has collected 2014-2016 data related to index of equity structure from 32 listed companies in Shanghai and Shenzhen, made descriptive statistical analysis and correlation analysis on it with spass20.0 statistical software, and discussed the relation between equity structure and performance of listed companies. The research finds that: Chinese listed companies for building industry still have relatively high equity concentration, imperfect internal governance mechanism and poor equity restriction. The effect of “bargaining” is difficultly developed to promote the growth of performance. China shall further strengthen the efforts to control, spur listed companies to reinforce the internal management, and optimize the equity structure to ensure the effective balance, with the purpose of accelerating the healthy and sustainable development of listed companies and safeguarding the interests of medium-small investors.

The Comparison on Corporate Governance between Temasek and State-Owned Companies in China

2014 ◽  
Vol 998-999 ◽  
pp. 1634-1637
Author(s):  
Xu Bei Zhang
Keyword(s):  
Corporate Governance ◽  
Control Method ◽  
Institutional Environment ◽  
Governance Structure ◽  
Governance Mechanism ◽  
Internal Governance ◽  
Professional Managers ◽  
Restraint Mechanism ◽  
Structure State ◽  
Corporate Governance Mechanism

This paper proceeds as follows. Corporate governance, broadly speaking, is a science which studies enterprise power arrangement. In the narrow sense, it belongs to the ownership of enterprises; it is a science which researches how to empower professional managers and to use regulatory authority to their performance of duties. The improvement of the efficiency of the state-controlled corporate governance depends on the choice of corporate governance mechanism. Constrained by the institutional environment, the corporate governance is also affected by the internal governance structure. State-owned enterprises still face great difficulties when they manager to make a clear boundary between the central enterprises and government, separate ownership and management completely, achieve a sound governance structure. Temasek has a high quality management mode. The company special board composition and the control method of the layered progressive and effective restraint mechanism play a key role. State-owned enterprises can learn from Temasek’s experience of corporate governance, and promote the reform of the governance structure, to stimulate the vitality of enterprises.

scholarly journals TATA KELOLA PERUSAHAAN DAN VARIABILITAS LABA

2018 ◽  
Vol 2 (2) ◽  
pp. 224-246
Author(s):  
Ikka Tiaraintan Hariyanto ◽  
Novrys Suhardianto
Keyword(s):  
Corporate Governance ◽  
Financial Reporting ◽  
Capital Market ◽  
Governance Mechanism ◽  
Working Capital ◽  
Public Firms ◽  
Political Risks ◽  
Debt Contract ◽  
Effect Regression ◽  
Equity Ratio

This research aims to examine the influence of firm size, leverage, and corporate governance on earnings variability. We relate the earnings variability with the hypotheses of positive accounting theory and governance mechanism in Indonesia to identify factors that influence earnings variability. Using purposive sampling, we got 628 observations of Indonesian public firms during 2012 until 2014. This research uses common and fixed effect regression model to analyse the data. The results of this analysis show that the big firms have higher profit variability due to higher business and political risks. However, this finding applies only to samples with weak governance. Moreover, the greater the debt the company has, the greater the level of profit variability. This is due to the company's incentives to avoid breaching the debt contract, such as maintaining debt to equity ratio, working capital, or shareholder equity, by adopting aggressive accounting policies. Lastly, the CG mechanism does not affect the variability in earnings, indicating the lack of effective corporate governance in Indonesia. The CG mechanism in Indonesia has not generally been able to influence financial reporting behavior and capital market regulators need to take action to improve the effectiveness of corporate governance in Indonesia.

Shareholder Activism, Institutional Shareholders and Agency Problems in Malaysia

2016 ◽  
Vol 4 (3) ◽  
pp. 30-36
Author(s):  
Maizatul Akmal Musa ◽  
Shahril Eashak Ismail
Keyword(s):  
Corporate Governance ◽  
Best Practice ◽  
Emerging Market ◽  
Corporate Sustainability ◽  
Agency Problems ◽  
Shareholder Activism ◽  
Governance Mechanism ◽  
Contributing Factors ◽  
Internal Governance ◽  
Institutional Shareholders

Objective - The aim of this paper is to study the effectiveness of institutional shareholder activism in controlling corporate behaviours in Malaysia. Methodology/Technique - this study is investigated by critical reviewing previously published articles. Findings - Earlier researchers have viewed poor corporate governance as one of the main contributing factors to a major corporate disaster. The best practice of corporate governance suggests that shareholders should actively be engaged and involved with the investee companies to provide check and balance to the governance mechanism. This is particularly crucial for companies with suspicions of poor internal governance. The engagements from shareholders, especially the institutional shareholders in critical areas will give impacts to the governance structures and practices of the companies involved. Institutional shareholders usually have the capability to perform interventions throughout the year, not only limited to annual general meetings. Novelty - This study proved that corporate governance provides a structure to facilitate performance and also to enhance corporate sustainability. Type of Paper - Conceptual Keywords: Shareholder activism; institutional shareholders; corporate governance; Emerging Market; Agency problems.

scholarly journals THE EFFECT OF INTERNAL GOVERNANCE ON CORPORATE FINANCIAL CRIME OF COMPANIES IN MALAYSIA

2020 ◽  
Vol 2 (2) ◽  
pp. 53-64
Author(s):  
Wan Nailah Abdullah ◽  
Roshima Said ◽  
Kiymet Caliyurt
Keyword(s):  
Corporate Governance ◽  
Audit Committee ◽  
Financial Crime ◽  
Managerial Ownership ◽  
Governance Mechanism ◽  
Internal Governance ◽  
Web Based ◽  
Corporate Governance Mechanism ◽  
Risk Committee ◽  
Risk Management Committee

This empirical study proposes to examine one of the main areas in corporate governance i.e., the internal governance factors and their relationship with corporate financial crime and to find out whether their effectiveness as a corporate governance mechanism is still relevant in the prevention of corporate financial crime. The internal governance factors tested in the study are audit diligence, audit size, employee shares option scheme, managerial ownership and stand-alone risk management committee. The research was carried out by using a web-based data collection for corporate financial crime cases. The findings indicate a significant relationship between the existences of a stand-alone risk committee with corporate financial crime incidences. The result of the study serves as an empirical indicator for a firm’s consideration in deciding on the implementation of a stand-alone risk committee from its audit committee. Both the descriptive and correlation analyses produced by this paper provide new insights into the extent of corporate financial crime, as well as the empirical evidence of the effectiveness of having a stand-alone risk committee.

Do Auditors Price Breach Risk in Their Audit Fees?

2018 ◽  
Vol 33 (2) ◽  
pp. 177-204 ◽  
Author(s):  
Thomas J. (Tom) Smith ◽  
Julia L. Higgs ◽  
Robert E. Pinsker
Keyword(s):  
Audit Fees ◽  
Audit Committees ◽  
Governance Mechanism ◽  
Audit Risk ◽  
Internal Governance ◽  
Security Breaches ◽  
Management Protocol ◽  
Audit Fee ◽  
External Governance ◽  
Board Level

ABSTRACT Data security breaches have been shown in the literature to negatively affect firm operations. Auditors serve as an important, external governance mechanism with respect to a firm's overall risk management protocol. Consequently, our study examines whether auditors price breach risk into their fees and if a firm's internal governance can mitigate the potential increases in audit fees. Using a sample of breached firms ranging from 2005–2014, we adapt the Houston, Peters, and Pratt (2005) model to explore how auditors view audit risk related to breach risk. We find that breaches are associated with an increase in fees, but the result is driven by external breaches. Our evidence suggests the presence of board-level risk committees and more active audit committees may help mitigate the breach risk audit fee premium. Additional evidence suggests that both past breach disclosures as well as future disclosures are associated with audit fees.

Sign in / Sign up

Export Citation Format

Share Document