A Study on the Relationship between ESG Competency and Firm Value: Moderating Effect of Customer’s Awareness

2021 ◽  
Vol 50 (6) ◽  
pp. 1571-1593
Author(s):  
Yanghee Kim ◽  
Junhee Seok ◽  
Byungdo Kim
Keyword(s):  
Firm Value ◽  
Moderating Effect ◽  
The Relationship

scholarly journals Exploring the moderating effect of family CEO on the association between family ownership and firm value: An empirical analysis of top Indian family firms

2015 ◽  
Vol 12 (2) ◽  
pp. 349-361
Author(s):  
Lakshmi Kalyanaraman
Keyword(s):  
Family Member ◽  
Empirical Analysis ◽  
Interaction Effect ◽  
Firm Value ◽  
Family Firms ◽  
Stock Exchange ◽  
Moderating Effect ◽  
Market Valuation ◽  
Family Ownership ◽  
The Relationship

We study 288 family firms included in the NSE CNX 500 index of the National Stock Exchange of India. We find an entrenchment-alignment-entrenchment relationship between family ownership and firm value. We show that family CEO has a negative moderating effect on the relationship between family ownership and firm value. When the interaction effect of Family CEO on family ownership is controlled, only family shareholding in the alignment range is found to be statistically significant. The study shows that family firms with family CEO suffer from a decrease in market valuation. This finding is extremely valuable given the fact that India is dominated by family firms and majority of family firms appoint a family member as CEO

Independent Directors' Tenure, Expropriation, Related Party Transactions, and Firm Value

2022 ◽  
pp. 369-394
Author(s):  
Chee Yoong Liew ◽  
S. Susela Devi
Keyword(s):  
Corporate Governance ◽  
Firm Value ◽  
Moderating Effect ◽  
Ownership Concentration ◽  
Independent Directors ◽  
Policy Makers ◽  
Related Party Transactions ◽  
Financial Valuation ◽  
Agency Conflict ◽  
The Relationship

This chapter analyses the relationship between related party transactions (RPT) and firm value and whether independent directors' tenure (IDT) strengthens or weakens this relationship. Further, it examines ownership concentration's role on this moderating effect of IDT in Malaysian family and non-family corporations. It is found that that IDT weakens the relationship between RPT and firm value. However, ownership concentration strengthens this moderating effect of IDT. Interestingly, family corporations are more likely to show a stronger impact of ownership concentration which we allude to concerns of maintaining reputation. The research results remain after controlling for technology corporations. The findings' have important implications for policy makers, practitioners and regulators, especially in emerging economies globally.Keywords: Agency Conflict, Corporate Financial Valuation, Independent Directors' Term in the Office, Corporate Governance, Family Corporations, Emerging Markets

Independent Directors' Tenure, Expropriation, Related Party Transactions, and Firm Value

2020 ◽  
pp. 182-207
Author(s):  
Chee Yoong Liew ◽  
S. Susela Devi
Keyword(s):  
Corporate Governance ◽  
Firm Value ◽  
Moderating Effect ◽  
Ownership Concentration ◽  
Independent Directors ◽  
Policy Makers ◽  
Related Party Transactions ◽  
Financial Valuation ◽  
Agency Conflict ◽  
The Relationship

This chapter analyses the relationship between related party transactions (RPT) and firm value and whether independent directors' tenure (IDT) strengthens or weakens this relationship. Further, it examines ownership concentration's role on this moderating effect of IDT in Malaysian family and non-family corporations. It is found that that IDT weakens the relationship between RPT and firm value. However, ownership concentration strengthens this moderating effect of IDT. Interestingly, family corporations are more likely to show a stronger impact of ownership concentration which we allude to concerns of maintaining reputation. The research results remain after controlling for technology corporations. The findings' have important implications for policy makers, practitioners and regulators, especially in emerging economies globally.Keywords: Agency Conflict, Corporate Financial Valuation, Independent Directors' Term in the Office, Corporate Governance, Family Corporations, Emerging Markets

Social and ethical practices and firm value: the moderating effect of green innovation: evidence from international ESG data

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Salim Chouaibi ◽  
Jamel Chouaibi
Keyword(s):  
Firm Value ◽  
Small Sample ◽  
Moderating Effect ◽  
Market Valuation ◽  
Green Innovation ◽  
Data Set ◽  
Ethical Practices ◽  
Content Type ◽  
Dynamic Dimension ◽  
The Relationship

Purpose This study aims to examine the potential effect of integrating social and ethical practices into strategy on the market valuation of environmental, social and governance (ESG) businesses using the moderating effect of green innovation. Design/methodology/approach The sample used consisted of 523 international firms listed on the ESG index and headquartered in North America and Western Europe, forming an unbalanced panel of 7,845 observations spanning the period 2005–2019. The authors run a fixed-effects panel regression model using the Thomson Reuters ASSET4 to test the relationship between societal and ethical practices and the stock market value creation. Similarly, as an extension of the research, this paper exploits two robustness analyzes. The authors tested the dynamic dimension of the data set through the generalized moment method and the effect of the legal system. Findings Evidence reveals a significant positive relationship between societal and ethical practices and businesses’ market valuation. The empirical results indicate that societal and ethical strengths increase firm value with the moderating effect of green innovation and weaknesses reduce it. The results found with the dynamic dimension of the data set indicate the existence of continuity between firm values over time. Research limitations/implications Given the long study period, many firms with missing data were eliminated. To avoid the small sample size, countries with few observations were included, which led to an uneven distribution between observations per country. Practical implications Findings from this paper can help ESG firms to consider their future growth opportunities in a context where the approach of business ethics occupies a central position in business valuation. Originality/value This study is the only study that provides ESG companies with seven different nationalities with evidence for the effect of social and ethical practices regarding market valuation. This paper is also relevant as it addresses the relationship between social effectiveness and financial efficiency, as well as the dynamic effect of this relationship.

scholarly journals Corporate Governance, Capital Structure, Ownership Structure, And Corporate Value Of Companies Listed At The Nairobi Securities Exchange

2021 ◽  
Vol 17 (15) ◽  
Author(s):  
David Onguka ◽  
Cyrus M. Iraya ◽  
Winnie L. Nyamute
Keyword(s):  
Corporate Governance ◽  
Regression Analysis ◽  
Capital Structure ◽  
Ownership Structure ◽  
Firm Value ◽  
Joint Effect ◽  
Moderating Effect ◽  
Series Data ◽  
Corporate Value ◽  
The Relationship

This paper focuses on establishing the relationship among corporate governance, capital structure, ownership structure, and firm value for companies listed at the Nairobi Security Exchange (NSE). The study tested three hypotheses that explored various aspects of this relationship: First, there is no intervening effect on the capital structure on the relationship between corporate governance and corporate value; Second, there is no significant moderating effect of ownership structure on the relationship between corporate governance and corporate value; and finally, there is no significant joint effect of corporate governance, capital structure, and ownership structure on corporate value. The data of the study was obtained from audited financial statements of the firms listed at the NSE. A census survey for sixty-four publicly trading firms at the NSE was undertaken. The data of 64 corporations was cleaned, leaving a smaller number of 58 firms which formed over 90% of the sample. The analysis covered a five-year period between 2013 to 2017. The study adopted a positivism philosophy and a descriptive design. Descriptive statistics and diagnostic tests were undertaken and thereafter inferential statistics, specifically correlation and regression analysis, were used for hypothesis testing. The multiple regression analysis was used to test the relationship among corporate governance, capital structure, ownership structure, and corporate value. The panel data procedure was considered more appropriate as the sample data contained both cross-sectional and time-series data. The Baron and Kenny’s (1986) approach was used to assess the intervening and moderating effect of capital structure and ownership structure respectively on the relationship between corporate governance and corporate value. Corporate Governance was measured by a composite of board independence, board size, board remuneration, and corporate gender diversity. Capital structure was measured by leverage, while ownership structure was measured by ownership concentration, state ownership, family ownership, and foreign ownership. Firm performance was measured using the Tobin Q. The joint effect of corporate governance, capital structure, and ownership structure on corporate value was found to be positive and significant. However, Ownership structure and capital structure had no significant moderating and intervening effects respectively on the relationship between corporate governance and corporate value. This study makes an original contribution as it takes a more holistic approach of corporate governance development by probing whether improving corporate governance is linked to the enhanced corporate value. The study recommends that corporate shareholders, boards, regulators, and management of listed corporations should put in place robust policies. This will ensure the implementation and monitoring of corporate governance principles and ensure congruence in their activities of the oversight of corporate objectives of optimizing corporate value and minimizing fraud and failure risks of corporations.

scholarly journals Income smoothing and firm value in a regulated market: the moderating effect of market risk

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Segun Abogun ◽  
Ezekiel Aiyenijo Adigbole ◽  
Titilope Esther Olorede
Keyword(s):  
Firm Value ◽  
Generalized Method Of Moments ◽  
Market Risk ◽  
Moderating Effect ◽  
Income Smoothing ◽  
Share Price ◽  
Security Market ◽  
Content Type ◽  
The Impact ◽  
The Relationship

PurposeThis study aims to examine the impact of income smoothing on the value of firms in a regulated security market, moderated by market risk. This is based on the prevalence of accounting scandals resulting in the collapse of firms which has been attributed to the opportunistic behaviors of managers.Design/methodology/approachThe ex post facto research design was employed, and as such, data were gathered from secondary sources. The quantitative approach was also used in the study. Furthermore, the system generalized method of moments (Blundell–Bond) panel estimation technique was used for analyzing the data. Income smoothing was measured using the accrual based methods, while firm value was measured using share price.FindingsThe study found that income smoothing has a negative significant impact on firm value. The study also revealed that market risk is a significant variable that defines the relationship between income smoothing and firm value.Originality/valueTesting the moderating effect of market risk on the relationship between income smoothing and firm value is unique to this study, particularly from a regulated security market and emerging economy.

The role of sustainability reporting in shareholder perception of tax avoidance

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Astrid Rudyanto ◽  
Kashan Pirzada
Keyword(s):  
Firm Value ◽  
Tax Avoidance ◽  
Sustainability Reporting ◽  
Positive Association ◽  
Moderating Effect ◽  
Effective Tax Rate ◽  
Content Type ◽  
Tax Rate ◽  
Environmentally Sensitive ◽  
The Relationship

Purpose The purpose of this study is to examine the moderating effect of sustainability reporting on the relationship between tax avoidance and firm value. This study also examines the moderating effect of sustainability reporting in both environmentally sensitive firms and non-environmentally sensitive firms. Design/methodology/approach This research uses moderated panel regression with 596 observations and 734 observations for cash effective tax rate (ETR) and generally accepted accounting principles effective tax rate (GAAP ETR) of firms listed on the Indonesian Stock Exchange between 2014 and 2016. Tax avoidance is measured by both cash ETR and GAAP ETR. Findings This paper shows that sustainability reporting moderates the relationship between tax avoidance (GAAP ETR) and firm value. The results show that GAAP ETR has a negative association with firm value in non-environmentally sensitive firms and a positive association with firm value in environmentally sensitive firms. Consequently, the sustainability report alters only the effect of GAAP ETR on firm value in non-environmentally sensitive firms. The results imply that, unlike environmentally sensitive firms, non-environmentally sensitive firms need sustainability reporting to reduce the reputational costs of tax avoidance. Originality/value How shareholders view tax avoidance remains unclear; research on this topic often fails to produce a uniform result. The present research fills this gap by using the existence of sustainability reporting as proof of companies’ ethical motivations to moderate the association of tax avoidance and firm value, which has not been discussed in previous research.

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