scholarly journals Dynamic effect of corporate governance on financing decisions: Evidence from Sri Lanka

2021 ◽  
Vol 17 (2) ◽  
pp. 133-159
Author(s):  
Ruzita Abdul-Rahim ◽  
Mohamed Cassim Abdul Nazar ◽  
Mohd Hasimi Yaacob Abdul-Rahim
Keyword(s):  
Corporate Governance ◽  
Sri Lanka ◽  
Best Practices ◽  
Generalized Method Of Moments ◽  
Dynamic Effect ◽  
Chief Executive ◽  
Debt Financing ◽  
Financing Decision

This study investigates the role of corporate governance in influencing the debt financing decision of 198 non-financial listed companies in Sri Lanka from 2009 to 2016. Sri Lanka’s corporate governance (CG) code promotes dispersed ownerships, larger board size and balance of power and authority through various means, such as exclusivity between the Chief Executive Officer and Chairperson and the independent Board composition. This study tests the role of CG through four indicators while controlling for other firm-specific variables. Results of the two-step system Generalized Method of Moments on a balance panel data shows that the effect of CG indicators on financing decision depends on the financing terms. In general, the influence of CG indicators is significant on the two debt financing measurements, except for managerial ownership when investments in assets are involved. This influence appears eminent in predicting the debt ratio, although the effect is not necessarily consistent with the hypotheses. The latest revision on CG codes of best practices has also improved firms’ access to debt financing, except for raising long-term debt to acquire assets. Results imply that the Sri Lankan firms adopting the CG best practices would need to rely on other factors to access long-term debt financing or on other external financing sources.

Labor lawsuits and debt maturity

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Omer Unsal
Keyword(s):  
Chief Executive ◽  
Debt Maturity ◽  
Employee Relations ◽  
Short Term ◽  
Content Type ◽  
Negative Effect ◽  
Debt Market ◽  
Legal Fees

Purpose This paper aims to investigate how firms’ relationships with employees define their debt maturity. The authors empirically test the role of employee litigations in influencing firms’ choice of short-term versus long-term debt. The authors study employee relations by analyzing the importance of the workplace environment on capital structure. Design/methodology/approach The author’s test hypotheses using a sample of US publicly traded firms between 2000 and 2017, including 3,056 unique firms with 4,256 unique chief executive officer, adopting the fixed effect panel model. Findings The authors document that employee litigations have a significant negative effect on the use of short-term debt and a significant positive affect on long-term debt. Employee litigations, along with legal fees, outcomes and charging parties, matter the most in explaining debt maturity. In addition, frequently sued firms abandon the short-term debt market and use less shareholders’ equity to finance their operations while relying more on the longer debt market. Originality/value To the best of the authors’ knowledge, this is the first study to examine the role of employee mistreatment in debt maturity choice. The study extends the lawsuit and finance literature by examining unique, hand-collected data sets of employee lawsuits, allegations, violations, settlements, charging parties, case outcomes and case durations.

Family Business Governance

2021 ◽  
pp. 24-40
Author(s):  
Reena Agrawal ◽  
Ganga Bhavani
Keyword(s):  
Corporate Governance ◽  
Best Practices ◽  
Family Business ◽  
Family Businesses ◽  
Business Strategies ◽  
Business Organizations ◽  
Substantial Portion ◽  
Advantages And Disadvantages ◽  
The World

Corporate governance is a significant tool to build strong and long relationships among various stakeholders in kinds of business organizations. Family businesses are not an exception to this. Like any other businesses, family businesses also need to have governance in place and practice to achieve the business strategies and to have long-term succession. Family-owned businesses are the backbone of many countries' economies in the world contributing substantial portion of GDP. Considering these, it is important to know the best practices of governance in family owned business organizations and the role played by governance to improve the strengths of these businesses. The chapter throws light on family business governance and explores various important practices highlighting their advantages and disadvantages in detail.

Business students’ perceptions of corporate governance best practices

2016 ◽  
Vol 16 (2) ◽  
pp. 361-376 ◽  
Author(s):  
Kathryn M. Zuckweiler ◽  
Kirsten M. Rosacker ◽  
Suzanne K. Hayes
Keyword(s):  
Corporate Governance ◽  
Best Practices ◽  
College Graduates ◽  
Business Students ◽  
School Curriculum ◽  
Strategic Human Resource Management ◽  
Content Type ◽  
Governance Practice ◽  
Corporate Governance Practice

Purpose This paper aims to develop a better understanding of business students' perceptions of the relative importance of corporate governance best practices within the context of major area of study and compare student rankings of corporate governance best practices to those of working professionals. Design/methodology/approach Using a previously published survey, data were collected from business students at two Midwestern US universities and analyzed using factor analysis. Findings This research demonstrated that students rank strategic human resource management as the most important corporate governance practice, matching the perceptions of professionals. Accounting majors report significantly greater understanding of corporate governance, the importance of corporate governance to business and the role of understanding corporate governance in their careers as compared to management majors. Research limitations/implications This study is limited by the inclusion of business students at only two US universities. Further studies should be conducted to better understand the similarities and differences between students and professionals and accounting and management majors in their perceptions of corporate governance best practices. Practical implications Managers can use these findings to enhance the training recent college graduates receive on corporate governance topics. Business schools can use these findings to evaluate ways to embed corporate governance throughout the curriculum. Originality/Value This research highlights gaps in current business school curriculum coverage of corporate governance best practices. It compares and contrasts students' and professionals' perceptions of best practices and offers suggestions for managers and educators.

scholarly journals Corporate governance in the Brazilian banking sector: A study of practices adopted by the boards

2011 ◽  
Vol 8 (2) ◽  
pp. 37-46
Author(s):  
Marcelle Colares Oliveira ◽  
Lindenberg Araújo Aragão ◽  
Vera Maria Rodrigues Ponte
Keyword(s):  
Corporate Governance ◽  
Best Practices ◽  
Chief Executive Officer ◽  
Board Member ◽  
Banking Sector ◽  
Early Stage ◽  
Chief Executive ◽  
Stage Of Development ◽  
Banking Institutions ◽  
And Control

This study is an analysis of the best practices of corporate governance adopted by the boards of Brazilian banking institutions. The findings show that most banks adhere to the latest Brazilian Institute of Corporate Governance guidelines with regard to board size and to the standards required by BM&FBovespa in terms of independence. The banks studied are rigorous with regard to audits and control in the process of corporate governance and most have a diversified board with the positions of chief executive officer and chairman occupied by different individuals. Practices regarding disclosure of board member remuneration are still at an early stage of development with banks restricting disclosure to what is required by law.

scholarly journals Determinants of capital structure and its impact on corporate governance: An emerging market empirical study

2017 ◽  
Vol 1 (1) ◽  
pp. 17-32 ◽  
Author(s):  
Maqbool Ahmad ◽  
Basheer Ahmed ◽  
Munib Badar
Keyword(s):  
Decision Making ◽  
Corporate Governance ◽  
Capital Structure ◽  
Audit Committee ◽  
Emerging Market ◽  
Debt Financing ◽  
Debt Ratio ◽  
Return On Assets ◽  
Financing Decision ◽  
Financing Decisions

This research endeavored to explore two schemes of literature pertains to capital structure i.e. antecedents and consequences of debt borrowing on firm specific and corporate governance factors. This research explores the determinants of capital structure to ascertain whether the financing decisions are optimal or not. Non-financial sector firms accumulated 70% of total firms listed on Pakistan Stock Exchange (PSX). To conclude proposed research, unbalance panel data for 160 non-financial firms listed at PSX from 2007 to 2011 is selected. Results revealed that Return on assets contributes 25% influence on financing decisions regarding debt. Similarly Debt borrowings affect negatively in overall profits. However, its intensity differs within different levels of its determinants. Corporate Governance CG index is negatively associated with debt ratio. Return on assets in terms of size of firm is impacted 29%. Institutional Ownership and debt financing has found a negative association with one and each other. Ownership concentration and debt ratio have strong positive binding between them. Significance of Board Size holds only 2% in debt financing decision making whereas CEO duality holds 68% significance in debt financing decision making. Audit Committee independence and debt ratio are also negatively related. Non-executive directors are found with no influence on capital structure decision making. Board Independence is positively related with leverage and found with no particular implementation of debt financing decisions makings. The outcome of this study can be used to provide managerial information whether their financing decisions are optimal or not and how they should enhance the scope of their financing decisions.

scholarly journals Role of Business Age, Scale & Risk in Debt Financing Choices for the Pakistani Textile & Apparel Industry

e-Finanse ◽  
2020 ◽  
Vol 16 (3) ◽  
pp. 119-136
Author(s):  
Zahid Bashir ◽  
Muhammad Usman Arshad ◽  
Muhammad Asif ◽  
Muhammad Abbas ◽  
Hasnain Ali
Keyword(s):  
Debt Financing ◽  
Future Research ◽  
Debt Ratio ◽  
Equity Financing ◽  
Tax Shield ◽  
Total Debt ◽  
Textile And Apparel ◽  
Financing Choice

Abstract The motivation for this research enquiry is to identify the role of the business age, size and risk for the choice of debt financing in the textile and apparel sector of Pakistan along with other controlled factors. The textile and apparel sector of Pakistan comprises 464 listed entities as the targeted population while the study randomly finalized 60 firms as the sample after carefully analyzing the required information from the financial statements during the annual revenue streams of 2013-2019. The predicted variable for this research enquiry is measured by short, long and total-debt ratios while the predictor variables include the business age, firm’s scale and risk. In addition, the research includes tax shield, tangibility, liquidity, profitability, and growth as the controlling factors. The study estimated that the choice of total-debt ratio is strongly affected by business age, size and risk along-with tax shield, tangibility, liquidity and profitability while the choice of short-term debt ratio mainly depends upon the firm’s scale and age along with the tax shield. In addition, the choice of long-term debt ratio is strongly explained by the firm’s scale and age along with the tax shield, liquidity and profitability. The estimated evidence provides management with the implications for the textile and apparel sector of Pakistan to consider as significant factors in deciding the debt financing choice of this sector. The estimated evidence of this research enquiry applies to the non-financial textile sector only and cannot be generalized to the financial sector. Future research may enhance the financing choice towards the inclusion of equity financing with the same set of variables.

scholarly journals Corporate governance and resource management in Nigeria: a paradigm shift

2018 ◽  
Vol 16 (1) ◽  
pp. 259-266 ◽  
Author(s):  
Olabode A. Oyewunmi ◽  
Adebukola E. Oyewunmi
Keyword(s):  
Corporate Governance ◽  
Resource Management ◽  
Best Practices ◽  
Paradigm Shift ◽  
Corporate Sustainability ◽  
Central Theme ◽  
Corporate Environment ◽  
Economic Resource ◽  
Narrative Method

The underlying significance of instituting measures for effective corporate governance and rewarding resource management outcomes cannot be relegated. The countries and organizations that deemphasize this practice have mortgaged their potential for long-term growth and corporate sustainability. This paper adopts a critical narrative method to deconstruct the essence of corporate governance and economic resource management ideals. The paper furthers the ongoing conversations on two interrelated business concepts, and provides an apt perspective towards unlocking the essence of corporate governance relative to the Nigeria’s corporate environment. It depicts a corporate paradigm shift that accommodates the dynamics of global best practices taking into account some peculiarities of Nigeria’s corporate climate. The paper also captures relevant theoretical dimensions and pragmatic policy propositions, especially for underperforming socio-economic contexts. In the light of the central theme, specific issues are discussed under the sub-headings of conceptual and theoretical clarifications, corporate governance and resource management in Nigeria, shifting the paradigms, conclusion and recommendations.

scholarly journals The Financial Development And Economic Growth Nexus: The Role Of Saudi Arabian Financial Institutions

2019 ◽  
Vol 4 (6) ◽  
Author(s):  
Adel Bogari
Keyword(s):  
Economic Growth ◽  
Saudi Arabia ◽  
Financial Development ◽  
Financial Institutions ◽  
Generalized Method Of Moments ◽  
Democratic Accountability ◽  
Law And Order ◽  
Private Credit

The purpose of this paper is to assess the effects of the financial development and the financial institutions quality on the economic growth for the Saudi Arabia. Using generalized Method of Moments (GMM) with a dynamic panel framework, this paper employs different measures of financial development namely the Liquid liabilities (LIQ), Private credit by deposit money banks and other financial institutions (CRE) and Central bank assets (ASS), and for financial institutions quality including socioeconomic conditions, investment profile, law and order, corruption, external conflicts and democratic accountability. For the period (1990-2017), our findings strongly support the hypothesis that financial development leads to growth in the Saudi Arabia. Moreover, empirical results support a positive and significant relationship observed between financial institutions quality and growth. The findings of this paper suggest the need to give more support to the financial development for Saudi Arabia banking that have been launched in the country since the last three decades and to improve the role played by the financial institutions to stimulate saving/investment and, consequently, long-term economic growth.  

scholarly journals Impact of Cash Holding on Firm Performance with Moderating Role of Corporate Governance

2021 ◽  
Vol 6 (2) ◽  
pp. 87-99
Author(s):  
Naveed Anjum ◽  
Dr. Faisal Khan ◽  
Shoib Hassan ◽  
Dr. Muhammad Arif
Keyword(s):  
Corporate Governance ◽  
Firm Performance ◽  
Unobserved Heterogeneity ◽  
Stock Exchange ◽  
Generalized Method Of Moments ◽  
Secondary Data ◽  
Cash Holding ◽  
Financial Firms ◽  
Moderating Role

The main aim of this research is to analyze the association between cashholding and firm performance with moderating role of corporate governance. For the purpose of analysis, secondary data of 145 non-financial firms listed at Pakistan Stock Exchange (PSX) is taken from 2006-2017. The dynamic Generalized Method of Moments (GMM) is applied to cater the problem of unobserved heterogeneity. The results of this study suggest that cash holding has a significant impact on firm performance. Moreover, corporate governance significantly moderates the relationship between cash holding and firm performance.

scholarly journals Perspectives of the Farmers on Collection of Vegetables at Dambulla Dedicated Economic Center in Sri Lanka

2022 ◽  
Vol 9 (12) ◽  
pp. 2826-2833
Author(s):  
Greshan, P.D.S. ◽  
Kithsiri, V.D.
Keyword(s):  
Supply Chain ◽  
Sri Lanka ◽  
Best Practices ◽  
Agricultural Products ◽  
Quality Degradation ◽  
Collection Process ◽  
High Level ◽  
And Training ◽  
Lack Of Knowledge

Agricultural products move through several channels before reaching the final consumers. The collection process of vegetable must be effective and efficient to avoid losses in the supply chain of vegetables. The Dambulla Dedicated Economic Center (DDEC) is considered as the main hub of vegetable and fruit distribution in Sri Lanka. The objective of this research is to analyze the role of DDEC in collection of vegetables in Sri Lanka and explore whether the center meets the best practices of vegetable collection. Transportation, packing and packaging, role of middlemen, and training and knowledge on vegetable collection process were reviewed. Data were collected using a semi structured questioner from 70 farmers linked to the DDEC. High level of quality degradation, poor packing and packaging, lack of knowledge and training on collection, and inefficient role of middlemen were identified as the main issues related to the vegetable collection process of DDEC in Sri Lanka.

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