scholarly journals Family-Owned Firms between Agency Conflicts and Stewardship: Corporate Governance Factors Driving Firm Performance

2016 ◽  
Vol 1 (2) ◽  
pp. 33-47 ◽  
Author(s):  
Md. Nur Alam Siddik ◽  
Sajal Kabiraj
Keyword(s):  
Corporate Governance ◽  
Least Square ◽  
Chinese Family ◽  
Family Ownership ◽  
Agency Conflicts ◽  
Return On Assets ◽  
Return On Equity ◽  
Ordinary Least Square ◽  
Family Leadership ◽  
Business And Management

The performance of family-owned firms has been driven by factors relating to family ownership, family leadership, and external supervision. In this paper, we offer an empirical study investigating the effects of those corporate governance concerns. To serve the purpose, we conducted a survey on 121 Chinese family-owned firms over the period of 2012-2014. Using pooled ordinary least square technique we find that family leadership and external supervision significantly influence the firms' Return on Assets (ROA) and Return on Equity (ROE) whereas family ownership significantly influences ROA, but not ROE. Empirical findings also indicate that firm size, total assets and solidity have significant impact on ROA and ROE. Discussing our empirical findings in light of stewardship and agency theories, we especially supplement stewardship theory due to the close alignment between owners and managers in family-owned firms.Journal of Business and Management Research, vol.1 (2), 2016, pp. 33-47

scholarly journals Impacts of Capital Structure on Performance of Banks in a Developing Economy: Evidence from Bangladesh

2016 ◽  
Author(s):  
Md. Nur Alam Siddik ◽  
Sajal Kabiraj ◽  
Shanmugan Joghee
Keyword(s):  
Capital Structure ◽  
Empirical Studies ◽  
Optimal Level ◽  
Least Square ◽  
Return On Assets ◽  
Policy Makers ◽  
Return On Equity ◽  
Ordinary Least Square ◽  
Earnings Per Share ◽  
Relative Deficiency

Capital structure decision plays an imperative role in firm’s performance. Recognizing the importance, there has been many studies inspected the rapport of capital structure with performance of firms and findings of those studies are inconclusive. In addition, there is relative deficiency of empirical studies examining the link of capital structure with performance of banks in Bangladesh. This paper attempted to fill this gap. Using panel data of 22 banks for the period of 2005-2014, this study empirically examined the impacts of capital structure on the performance of Bangladeshi banks assessed by return on equity, return on assets and earnings per share. Results from pooled ordinary least square analysis show that there are inverse impacts of capital structure on bank’s performance. Empirical findings of this study is of greater significance for the developing countries like Bangladesh because it will call upon concentration of the bank management and policy makers to pursue such policies to reduce reliance on debt and to accomplish optimal level capital structure. This research also contributes to empirical literatures by reconfirming (or otherwise) findings of previous studies.

scholarly journals Performance: Empirical Evidence From Malaysian Banking Industry

2019 ◽  
Vol 9 (3) ◽  
Author(s):  
Nazaria Md Aris ◽  
Suzila Mohamed Yusof ◽  
Lim Jia Wen
Keyword(s):  
Corporate Governance ◽  
Empirical Studies ◽  
Descriptive Analysis ◽  
Least Square ◽  
Bank Performance ◽  
Return On Equity ◽  
Ordinary Least Square ◽  
Governance Practices ◽  
Regression Diagnostic ◽  
One Year

Various theories and empirical studies have been applied and proposed to establish and explain how corporate governance practices are related to banks financial performance. This study concerns the relationship between corporate governance variables and bank performance in Malaysia. The data collected and analysed in this research is from quarter one year 2011 to quarter four year 2016. Various determinants have been identified namely return on equity(ROE) for bank performance measurement, CEO duality, board size, and board gender for corporate governance. Control variables are bank size and bank leverage. The methodologies adopted in this research includes descriptive analysis, correlation analysis, Pooled Ordinary Least Square (OLS) regression, Diagnostic Tests (Jarque-Bera Normality Test, Wooldridge Test and Variance Inflation Factor), Breusch-Pagan (BP) Lagrange Multiplier test, and Hausman test. In this study, the findings indicate that strong board composition and bank leverage were experience better performance.

scholarly journals The Impact of Liquidity Decision on Managerial Performance: Evidence from Private Commercial Banks in Bangladesh

2021 ◽  
Vol 8 (1) ◽  
pp. 17-24
Author(s):  
Sumi Saha
Keyword(s):  
Commercial Banks ◽  
Return On Investment ◽  
Least Square ◽  
Annual Reports ◽  
Return On Assets ◽  
Managerial Performance ◽  
Return On Equity ◽  
Ordinary Least Square ◽  
Net Profit ◽  
The Impact

This study has examined the impact of liquidity decisions on the managerial performance of ten listed conventional private commercial banks. The required data have been collected from the five years' annual reports of the sample banks and analyzed through formulating different null hypotheses. Findings from the testing of null hypotheses with the use of the ANOVA technique reveal that there is no significant variation of different indicators of liquidity decision as well as the managerial performance of the sample banks. Findings are taken from conducting the multiple regression analysis with ordinary least square (OLS) model also indicate that the indicators of liquidity decision namely current ratio is positively and insignificantly associated with net profit ratio as well as return on equity but negatively and insignificantly associated with return on assets as well as return on investment. Moreover, the networking capital ratio as another indicator of liquidity decision is negatively and insignificantly associated with net profit ratio, return on assets as well as return on equity but positively and insignificantly associated with return on investment of the sample banks over the study period.  

Relationship between Code of Corporate Governance and Corporate Financial Performance (An Empirical Study of Food Companies Listed on KSE)

GIS Business ◽  
2017 ◽  
Vol 12 (4) ◽  
pp. 01-09
Author(s):  
Asma Rafique Chughtai ◽  
Afifa Naseer ◽  
Asma Hassan
Keyword(s):  
Corporate Governance ◽  
Stock Exchange ◽  
Securities And Exchange Commission ◽  
Executive Directors ◽  
Agency Conflicts ◽  
Cross Sectional ◽  
Return On Equity ◽  
Governance Practices ◽  
Code Of Corporate Governance ◽  
The Impact

The crucial role that implementation of Code of Corporate Governance plays on protecting the rights of minorities, shareholders, local as well as foreign investors cannot be denied. Companies all over the world are required to implement their respective Code of Corporate Governance for avoiding agency conflicts between companies management and stakeholders and for assuring transparency in accountability. This paper aims at exploring the impact of implementation of corporate governance practices (designed by Securities and Exchange Commission of Pakistan) have on the financial position of companies. For explanatory variables of the study, composition of the board as per the Code of Corporate Governance that comprises of presence of independent, executive and non-executive directors has been taken into consideration. Return on equity has been taken as an indicator of firms profitability i.e. the dependent variable. For this study, companies listed on food producing sector of Karachi Stock Exchange have been screened for excogitation of the relationship. It is an empirical research based on nine years data from 2007–2015. Using Hausman Test for selecting the data analysis technique between Fixed or Random, Fixed Cross Sectional Panel Analysis has been used for analysis of the data collected. Findings indicate that presence of independent, executive and non-executive directors as per the code requirements levies a significant impact on the profitability of companies indicated by return on equity. It is, thus concluded that companies should ensure compliance with code of governance practices to reduce not only the agency issues but also to increase their profitability.

scholarly journals Corporate Governance, Political Connections, and Bank Performance

2019 ◽  
Vol 7 (4) ◽  
pp. 62 ◽  
Author(s):  
Haris ◽  
Yao ◽  
Tariq ◽  
Javaid ◽  
Ain
Keyword(s):  
Corporate Governance ◽  
Profit Margin ◽  
Political Connections ◽  
Return On Assets ◽  
Board Size ◽  
Bank Profitability ◽  
Return On Equity ◽  
Net Interest Margin ◽  
The Impact ◽  
Interest Margin

This study investigates the impact of corporate governance characteristics and political connections of directors on the profitability of banks in Pakistan. The study uses the data of 26 domestic banks over the latest and large period of 2007–2016. Our findings firstly affirm that bank profitability is negatively affected by the presence of politically connected directors on the board, reporting significantly lower return on assets, return on equity, net interest margin, and profit margin. Secondly, our findings also affirm the negative political influence on the sustainability of the banking industry, reporting significantly lower return on assets, return on equity, net interest margin, and profit margin during the government transition of banks having politically connected directors sitting on their board. Our findings further report an inverted U-shaped relationship between board size and bank profitability, suggesting that a board size beyond 8–9 members decreases the profitability. The study further finds a positive impact of board composition, board independence, and director compensation on bank profitability, while also finding a negative impact of frequent board meetings, presence of foreign directors, and audit committee independence.

scholarly journals PENGARUH BOOK TAX DIFFERENCES DAN ARUS KAS TERHADAP PERTUMBUHAN LABA

2016 ◽  
Vol 6 (1) ◽  
pp. 111
Author(s):  
Erika Ratih Windarti ◽  
Dwi Sulistiani
Keyword(s):  
Cash Flow ◽  
Sampling Method ◽  
Sample Selection ◽  
Positive Influence ◽  
Least Square ◽  
Return On Assets ◽  
Earnings Growth ◽  
Ordinary Least Square ◽  
Growth Method ◽  
Profit Growth

<p><strong>Abstract</strong><br /><br />This study aimed to obtain empirical results about the influence of book tax differences and cash flow toward the profit growth. Independent variables in this study were book tax differences which were proxied to be permanent differences and temporary differences, as well as the cash flow. Control variables used are return on assets (ROA) and the size of the company. The dependent variable was earnings growth. Method of sample selection used was the purposive sampling method and obtained samples of 27 companies. This test was using SPSS V 21 for Windows. The results showed that the permanent difference and temporary differences of the book tax differences have positive influence on the profit grouth of the company, while cash flow did not significantly influence the company’s profit growth.</p><p><strong>Abstrak</strong><br /><br />Penelitian ini bertujuan untuk memperoleh hasil empiris tentang pengaruh book tax differences dan arus kas terhadap pertumbuhan laba. Variabel independen dalam penelitian ini antara lain book tax differences yang diproksikan menjadi beda permanen dan beda temporer, serta arus kas. Variabel kontrol yang digunakan adalah Return On Assets (ROA) dan ukuran perusahaan. Sedangkan variabel dependennya adalah pertumbuhan laba. Analisis data dengan menggunakan regresi berganda (Ordinary Least Square). Hasil penelitian menunjukkan bahwa beda permanen dan beda temporer dari book tax differences serta arus kas berpengaruh positif terhadap pertumbuhan laba perusahaan. ROA dan ukuran perusahaan tidak berpengaruh signifikan terhadap pertumbuhan laba.</p>

scholarly journals COMPARAÇÃO DO DESEMPENHO ECONÔMICO E DE MERCADO DAS EMPRESAS: O CASO DAS COMPANHIAS CLASSIFICADAS NOS NÍVEIS DE GOVERNANÇA CORPORATIVA DA BOVESPA

2007 ◽  
Vol 12 (1) ◽  
pp. 88
Author(s):  
Rosilene Marcon ◽  
Everson Manoel De Souza
Keyword(s):  
Corporate Governance ◽  
Key Words ◽  
Economic Performance ◽  
Market Performance ◽  
Great Majority ◽  
Economic Sector ◽  
Return On Assets ◽  
Return On Equity ◽  
Before And After

This study had the objective to investigate the economical and of market performance of the Brazilian companies before and after the inclusion in the levels of corporate governance proposed by BOVESPA. The study period understood the years from 1999 to 2004, where the ratios were collected: Return on Equity, Return on Assets and Price-to-Book. The results showed good acting of the indicator P/VPA, due his/her the best performance of the Price-to-book. This conclusion is obtained through the evaluation of the behavior of the ratios, confronting the periods before and after event, as well as when being drawn comparative among the acting of the companies in relationship economic sector of performance. The comparative general of the ratios regarding the performance of the participant companies of the system of listing of BOVESPA it indicated that the great majority reached improvement of the performance, in other words, they presented larger return on assets and equity, as well as in the value of their actions after they migrate for some of the levels of corporate governance Key words: Economic performance. Bovespa. Corporate Governance.

scholarly journals Relationship Between Free Cash Flows and Corporate Governance Levels in the Light of Agency Theory

2021 ◽  
Vol 20 ◽  
pp. e3206
Author(s):  
Glaysson Aguilar de Araújo ◽  
Lara Alves Corrêa ◽  
Valéria Gama Fully Bressan ◽  
João Estevão Barbosa Neto ◽  
Bruna Camargos Avelino
Keyword(s):  
Corporate Governance ◽  
Stock Market ◽  
Cash Flows ◽  
Least Square ◽  
Publicly Traded ◽  
Potential Conflict ◽  
Return On Equity ◽  
Publicly Traded Companies ◽  
Corporate Governance Mechanisms ◽  
Free Cash Flows

This research analyzes the relationship between free cash flows (FCFs) and the different levels of Corporate Governance present in the Brazilian stock market. To this end, the sample was composed of 212 Brazilian publicly traded companies listed on Brasil, Bolsa, Balcão [B]³, in the period from 2010 to 2018. The methodology consisted of estimating a regression for panel data, using the random effects model, estimating by generalized least square (GLS) and assuming adjustments for autocorrelation and robust standard errors for heteroscedasticity. The results found, for the sample studied, suggest that Corporate Governance levels are positively related to the FCFs. In synergy, when compared to the Traditional level of [B]³, companies listed on the Novo Mercado and Level 2 levels tend to present higher FCF values. In addition, the larger the size of the companies and the higher their return on equity, the higher their FCFs tend to be, just as companies in stages of maturity tend to present lower FCF values. The relevance of this research is based on analyzing, in a stock market subject to imperfections, factors that may affect decisions about the level of cash maintenance of companies, more specifically by evaluating how Corporate Governance mechanisms relate to the theory of FCFs, in a context of potential conflict of interest.

scholarly journals The Impact of Corporate Governance on Profitability of Conventional Banks Operating in Pakistan

2020 ◽  
Vol 1 (4) ◽  
pp. 260-267
Author(s):  
Hafiz Muhammad Naveed ◽  
Shoaib Ali ◽  
Yao Hongxing ◽  
Saqib Altaf ◽  
Jan Muhammad Sohu
Keyword(s):  
Corporate Governance ◽  
Commercial Banks ◽  
Banking Sector ◽  
Board Independence ◽  
Return On Assets ◽  
Board Size ◽  
Return On Equity ◽  
Board Directors ◽  
Conventional Banks ◽  
The Impact

The key purpose of present research study to examine the association among corporate governance and profitability banks in developing counties. For such primary objective, annually based data collected from 2004 to 2016. The data taken from annual financial reports which issued by conventional banks.  We have used ADF (Augmented Dickey Fuller) test to examine the unit-root of variables. Moreover, the multiple linear regression utilized for hypothetical estimation. The results indicates that corporate governance and conventional banks profitability of Pakistan are bidirectional (positive-negative) associated to each other. In addition, the board size (Board Directors) is negatively associated with Return on assets and return on equity of banks. Similarly, the board independence (Insider-Outsider Board Directors) is positively influenced to return on assets and return on equity of conventional banks of Pakistan. The overall findings shows that board size and board independence are highly associated with return on equity than return on assets. Moreover, banking sector in developing countries the board size should contain on appropriate strength and acquire more professional and qualified staff. An optimal number of directors in a board size there is a need of commercial banks as to increase the profitability. To enhance the investors’ confidence with the bank there is also a need of the commercial banks to increases the board independency.

The determinants of profitability in Sharia-compliant corporations: evidence from Jordan

2019 ◽  
Vol 10 (4) ◽  
pp. 546-564 ◽  
Author(s):  
Nizar Mohammad Alsharari ◽  
Turki Raji Alhmoud
Keyword(s):  
Panel Data ◽  
Voluntary Disclosure ◽  
Fixed Effects ◽  
Management Style ◽  
Least Square ◽  
Return On Assets ◽  
Content Type ◽  
Return On Equity ◽  
Independent Variables ◽  
Internal And External Factors

Purpose The purpose of this paper is to examine the determinants of profitability of 28 Sharia-compliant corporations in Jordan over the three-year period of 2013-2015. Design/methodology/approach The two-stage least square (2SLS) regression analysis with fixed effects was conducted using two measures of profitability, namely: return on assets and return on equity. The empirical data were collected from 28 Sharia-compliant corporations in Jordan over the study period. A variety of internal and external factors was used to determine profitability. Findings In general, this analysis of the determinants of profitability for Sharia-compliant corporations confirmed previous findings. Regression findings revealed that previous year profitability, debt ratio, organizational structure, the size of the audit firm and voluntary disclosure to be important determinants of profitability of Sharia-compliant corporations in Jordan from 2013 to 2015. The independent variables of firm size, ownership ratio greater than 5%, liquidity ratio, percentage of non-Jordanian ownership or the age of the firm were not found to significantly influence the profitability of the corporations studied. Research limitations/implications The authors determined that the independent variables selected, with few exceptions, behaved according to expectations. Moreover, the current literature on the influence of management on performance, and thus, profitability, does not consider the philosophy under which business is conducted (a limitation with respect to the type of business conducted). For example, Sharia-compliant and non-Sharia-compliant firms operate under different sets of principles and rules. This variance in business philosophies may have an important bearing on management style, an aspect that has been neglected in the organizational management literature. The panel data from a three-year period was insufficient to validate the consistency of the results; future researchers may increase the length of the study periods to confirm results and increase the robustness of the data collection method. Practical implications The findings from the study have implications that may be functional for businesses, investors and policymakers in their focus on the Sharia-compliant business sector in Jordan. The factors influencing profitability may inform the setting of regulatory policy designed to stabilize and sustain the performance of Sharia-compliant corporations more broadly. Originality/value This study contributes to the growing body of literature on Islamic finance, and can be considered one of a very few that have examined the internal and external determinants of the profitability of Sharia-compliant corporations in a developing country such as Jordan, using panel data.

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