The effect of bank monitoring as an alternative of corporate governance mechanisms on the borrowers’ firm value: Evidence from Indonesian listed firms

The objective of this research is to examine the effect of bank monitoring as an alternative of corporate governance mechanisms on the borrowers’ firm value. The strengths of bank monitoring on the borrowers are measured based on the magnitude of the bank loan, the size of the loan from banks with high monitoring quality, the length of a bank loan outstanding period, and the number of lenders. The research hypotheses were tested using multiple regression model with a sample of 230 companies listed in Indonesia Stock Exchange during 2009. The empirical results show that only the size of the loan from banks with high monitoring quality and the number of lenders significantly influences the borrowers’ firm value. These findings imply that only banks with high monitoring quality could play an important role in the corporate governance and therefore increasing the firm value by their monitoring function. Furthermore, bank monitoring is less effective if a company borrows from many banks, and therefore decreasing the firm value.

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The Effects of Financial Restatement and Corporate Governance Mechanisms on Firm Value

International Journal of Engineering and Advanced Technology - Regular Issue ◽

10.35940/ijeat.f1094.0986s319 ◽

2019 ◽

Vol 8 (6S3) ◽

pp. 513-523

Keyword(s):

Corporate Governance ◽

Firm Value ◽

Negative Impact ◽

Governance Mechanisms ◽

Moderating Variables ◽

Listed Firms ◽

Financial Restatement ◽

Corporate Governance Mechanisms ◽

Financial Restatements ◽

The Relationship

This study examines the relationship between financial restatement and firm value in Malaysian public listed firms. In addition, it assesses the moderating effects provided by corporate governance mechanisms on the relationship of financial restatements and firm value. The study covers the period 2009-2015 and involves 142 public listed companies in Bursa Malaysia with financial restatements. The findings reveal that financial restatements do adversely impact firm value and that financial restatements negatively and significantly affect firm value. In terms of moderating variables, we find that the interaction between financial restatement and family ownership is negatively associated with firm value. In addition, this study also finds that the interaction between financial restatement and institutional ownership is positively and significantly associated with firm value. In conclusion, in the Malaysian context, this study establishes that financial restatement has a negative impact on firm value

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The Effects of Financial Restatement and Corporate Governance Mechanisms on Firm Value

International Journal of Engineering and Advanced Technology - Regular Issue ◽

10.35940/ijeat.f1126.0986s319 ◽

2019 ◽

Vol 8 (6S3) ◽

pp. 683-692

Keyword(s):

Corporate Governance ◽

Firm Value ◽

Negative Impact ◽

Governance Mechanisms ◽

Moderating Variables ◽

Listed Firms ◽

Financial Restatement ◽

Corporate Governance Mechanisms ◽

Financial Restatements ◽

The Relationship

This study examines the relationship between financial restatement and firm value in Malaysian public listed firms. In addition, it assesses the moderating effects provided by corporate governance mechanisms on the relationship of financial restatements and firm value. The study covers the period 2009-2015 and involves 142 public listed companies in Bursa Malaysia with financial restatements. The findings reveal that financial restatements do adversely impact firm value and that financial restatements negatively and significantly affect firm value. In terms of moderating variables, we find that the interaction between financial restatement and family ownership is negatively associated with firm value. In addition, this study also finds that the interaction between financial restatement and institutional ownership is positively and significantly associated with firm value. In conclusion, in the Malaysian context, this study establishes that financial restatement has a negative impact on firm value.

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How do corporate governance mechanisms affect a firm’s potential for bankruptcy?

Risk Governance and Control Financial Markets & Institutions ◽

10.22495/rgcv5i1art6 ◽

2015 ◽

Vol 5 (1) ◽

pp. 61-70

Author(s):

Rhesa Theodorus Hanani ◽

Christiana Fara Dharmastuti

Keyword(s):

Corporate Governance ◽

Audit Committee ◽

Stock Exchange ◽

Managerial Ownership ◽

Governance Mechanisms ◽

Listed Firms ◽

Corporate Governance Mechanisms ◽

Vector Decomposition ◽

Negative Effect ◽

Positive Effect

The purpose of this thesis is to understand the effects of corporate governance mechanisms on the potential for bankruptcy. This study is done by utilizing the linear regression fixed effect vector decomposition model on 30 listed firms from the consumer goods sector of Indonesia Stock Exchange during the 2010-2012 periods. The results of the study indicate that: the board of commissioners’ independence and size of the commissioners’ board pose a significant positive effect on the potential for bankruptcy; the presence of an audit committee and the presence of a nomination and remuneration committee pose a significant negative effect and institutional ownership and managerial ownership do not significantly affect the potential for bankruptcy.

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Corporate governance and conglomerate diversification strategy – evidence from Vietnam

International Journal of Emerging Markets ◽

10.1108/ijoem-10-2016-0260 ◽

2018 ◽

Vol 13 (6) ◽

pp. 1578-1596 ◽

Cited By ~ 3

Author(s):

Thi Xuan Trang Nguyen

Keyword(s):

Corporate Governance ◽

Stock Exchange ◽

Board Composition ◽

Governance Mechanisms ◽

Content Type ◽

Unrelated Diversification ◽

Corporate Governance Mechanisms ◽

Control Devices ◽

Interest Alignment ◽

The Relationship

Purpose The purpose of this paper is to examine the impact of internal corporate governance mechanisms, including interest alignment and control devices, on the unrelated diversification level in Vietnam. Additionally, the moderation of free cash flow (FCF) on these relationships is also tested. Design/methodology/approach The study is based on a balanced panel data set of 70 listed companies in both stock markets, Ho Chi Minh Stock Exchange and Hanoi Stock Exchange, in Vietnam for the years 2007–2014, which gives 560 observations in total. Findings The results show that if executive ownership for CEOs is increased, then the extent of diversification is likely to be reduced. However, the link between unrelated diversification level and executive stock option, another interest alignment device, cannot be confirmed. Among three control devices (level of blockholder ownership, board composition and separation of CEO and chairman positions), the study finds a positive connection between diversification and blockholder ownership, and statistically insignificant relations between the conglomerate diversification level and board composition, or CEO duality. Additionally, this study discovers a negative link between diversification and state ownership, although there is no evidence to support the change to the effect of each internal corporate governance mechanism on the diversification level of a firm between high and low FCF. Practical implications The research can be a useful reference not only for investors and managers but also for policy makers in Vietnam. This study explores the relationship among corporate governance, diversification and firm value in Vietnam, where the topics related to effectiveness of corporate governance mechanisms to public companies has been increasingly attractive to researchers since the default of Vietnam Shipbuilding Industry Group (Vinashin) happened in 2010 and the Circular No. 121/2012/TT-BTC on 26 July 2012 of the Vietnamese Ministry of Finance was issued with regulations on corporate governance applicable to listed firms in this country. Originality/value This research, first, enriches current literature on the relationship between corporate governance and firm diversification. It can be considered as a contribution to the related topic with an example of Vietnam, a developing country in Asia. Second, the research continues to prove non-unification in results showing the relationship between corporate governance and conglomerate diversification among different nations. Third, it provides a potential input for future research works on the moderation of FCF to the effects of corporate governance on diversification.

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Capital Structure and Corporate Governance Mechanisms in Kuwait Stock Exchange (KSE)

International Journal of Economics and Finance ◽

10.5539/ijef.v12n6p38 ◽

2020 ◽

Vol 12 (6) ◽

pp. 38

Author(s):

Mejbel Al-Saidi

Keyword(s):

Corporate Governance ◽

Capital Structure ◽

Stock Exchange ◽

Ownership Concentration ◽

Government Ownership ◽

Governance Mechanisms ◽

Corporate Governance Mechanisms ◽

Kuwait Stock Exchange ◽

Corporate Capital Structure ◽

The Impact

The study investigated the impact of corporate governance mechanisms on the corporate capital structure of the Kuwait Stock Exchange (KSE). Specifically, this study linked five corporate governance mechanisms—large shareholder ownership concentration, government ownership concentration, board size, board independence, and family directors—with capital structure for 81 non-financial listed firms between 2017 and 2018. The data indicated that only government ownership concentration and family directors affect capital structure.

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Pengaruh Ukuran Perusahaan Dan Corporate Governance Terhadap Manajemen Laba Di Industri Perbankan Indonesia

Jurnal Ilmiah Akuntansi Kesatuan ◽

10.37641/jiakes.v9i1.487 ◽

2021 ◽

Vol 9 (1) ◽

pp. 111-120

Author(s):

Karina Karina ◽

Sutarti Sutarti

Keyword(s):

Corporate Governance ◽

Earnings Management ◽

Audit Committee ◽

Banking Sector ◽

Audit Quality ◽

Stock Exchange ◽

Governance Mechanisms ◽

Audit Firm ◽

Corporate Governance Mechanisms ◽

Size Firm

The purpose of this research is to provide empirical evidence of the affect of ownership concetration, firms size, and corporate governance mechanisms on earnings management. Ownership concetration was measure by the biggest stock of individual or organization, firms size was measure by natural logaritma of net assets, and corporate governance mechanisms were measure by three variabels (composition of board of commisioner, audit quality were measure by industry specialize audit firm, and composition of audit committee). Earnings management was measure by discretionary accruals use Modified Jones Method. The population of this research is 41 companies in the banking sector which were listed in Indonesian Stock Exchange (IDX). The research data were collected from banking companies financial statement for the period of 2016 to 2018. Based on purposive sampling method. The reseacrh hypotesis were tested using multiple regression analysis. The results of this research show that firm size, firm of commissioner and proportion of commissioner have significant relationships with earnings management. Next, variables composition of board of commissioner, ownership concetration and specialize audit firm have no significant relationship with earnings management. Keywords: ownership concetration, firms size, corporate governance, earnings management

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Corporate governance and risk in cross-listed and Canadian only companies

Management Decision ◽

10.1108/md-10-2017-1052 ◽

2019 ◽

Vol 57 (10) ◽

pp. 2740-2757 ◽

Cited By ~ 2

Author(s):

Atreya Chakraborty ◽

Lucia Gao ◽

Shahbaz Sheikh

Keyword(s):

Corporate Governance ◽

Differential Effect ◽

Composite Index ◽

Governance Mechanism ◽

Firm Risk ◽

Governance Mechanisms ◽

Content Type ◽

Listed Firms ◽

Corporate Governance Mechanisms ◽

The Impact

Purpose The purpose of this paper is to investigate if there is a differential effect of corporate governance mechanisms on firm risk in Canadian companies cross-listed on US markets and Canadian companies not cross-listed (Canadian only companies). Design/methodology/approach Using a sample comprised of all Canadian companies included in the S&P/TSX Composite Index for the period 2009–2014, this study applies OLS and fixed effect regressions to investigate the effect of corporate governance mechanisms on firm risk. Interaction variables between governance mechanisms and the cross-listing status are used to examine if this effect is different for cross-listed firms. Findings Results indicate that the effect of board characteristics such as size, independence and proportion of female directors remains the same in both cross-listed and not cross-listed firms. CEO duality and insider equity ownership impact firm risk only in cross-listed companies, while institutional shareholdings, environmental, social and governance disclosure and family control affect firm risk in Canadian only firms. Overall, the empirical results indicate that some governance mechanisms impact firm risk only in firms that cross-list, while others are well-suited for Canadian only firms. Practical implications This study suggests that some of the differences between Canadian companies that cross-list and the Canadian companies that do not cross-list in US stock markets may change the impact of governance mechanisms on firm risk. Therefore, these findings have important implications for the design of governance mechanisms in Canadian firms. Since some of these differences are common to other economies, the conclusions can be extended to companies in other countries with similar governance structures. Originality/value Although previous studies have investigated the effect of governance mechanism on firm risk, this is the first paper that studies the differential effect for companies that cross-list in US markets. Specifically, differences in the ownership structure, firm control and in the regulatory and institutional environment, may explain this differential effect. Unlike most of the previous studies that focus on the effect of individual governance mechanisms, this study uses several mechanisms and their interactions at the same time.

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