scholarly journals The Corporate Governance and Interdependence of Investment and Financing Decisions of Non-Financial Firms in Pakistan

2018 ◽  
pp. 316-323
Keyword(s):  
Corporate Governance ◽  
Panel Data ◽  
Stock Exchange ◽  
Emerging Market ◽  
Investment Decisions ◽  
Simultaneous Equation ◽  
Equation Modeling ◽  
Panel Data Estimation ◽  
Investment And Financing ◽  
Financing And Investment

This study investigates the interdependence between financing and investment decisions in the presence of corporate governance factors of three hundred non-financial companies listed on the emerging market of Pakistani Stock Exchange (PSX). The sample is chosen randomly over a five-year period from 2012 to 2017. Using a panel data methodology, the regression models are derived based on the simultaneous equation modeling. Four factors of corporate governance mechanisms are identified: family ownership, managerial ownership, board size and board composition. This is among the earliest studies in Pakistan to consider simultaneity of financing and investment decisions by adopting Panel Data estimation technique. The major contributions of this study are: first, financing and investment decisions must be determined simultaneously. The results show that both investment and financing have positive impacts on each other and there exists a simultaneity among them.

scholarly journals Investigating the effect of corporate governance on audit quality and its impact on investment efficiency

2020 ◽  
Vol 17 (3) ◽  
pp. 175-188
Author(s):  
Walid Shehata Mohamed Kasim Soliman
Keyword(s):  
Corporate Governance ◽  
Structural Equation ◽  
Audit Quality ◽  
Stock Exchange ◽  
Investment Decisions ◽  
Equation Modeling ◽  
Investment Efficiency ◽  
Listed Firms ◽  
Good Environment ◽  
Egyptian Stock Exchange

There is an academic discussion about investment efficiency, regarding its determinants and effects. Corporate Governance (CG) and Audit Quality (AQ) are determinants of investment efficiency The main objective of the article is to investigate the effect of CG and AQ on investment efficiency, this objective is divided into sub-objectives: to investigate the direct effect of CG on AQ, AQ on investment efficiency, and CG on investment efficiency. Moreover, the indirect effect of CG on investment efficiency through AQ as a mediator variable. This paper focuses on non-financial listed firms in the Egyptian Stock Exchange (EGX), especially firms recorded in EGX 100 for four years’ period (2013–2018), for 103 firms and 412 completed observations. The researcher uses Structural Equation Modeling (SEM) through SmartPLS software. The paper shows evidence that management that has good CG mechanisms obtains a suitable atmosphere to prepare transparent financial statements, which helps enhance the auditor’s role and improve AQ. Improving AQ lowering IA, which increases the trust of investors in management decisions, this leads to reduce pressure on management and improve efficiency of investment decisions. Having good CG mechanisms provides management with a good atmosphere to make right investment decisions, and having good CG mechanisms increases AQ, which helps management to have a good environment to make investment decisions with higher efficiency, or in other words, there is a significant and positive effect of integration between CG and AQ on investment efficiency.

scholarly journals Determinants of internet financial disclosure in an emerging market: lessons from Brazil

2008 ◽  
Vol 5 (2) ◽  
pp. 379-392
Author(s):  
Wesley Mendes-da-Silva ◽  
Theodore E. Christensen ◽  
Vernon J. Richardson
Keyword(s):  
Corporate Governance ◽  
Voluntary Disclosure ◽  
Stock Exchange ◽  
Emerging Market ◽  
Financial Information ◽  
Financial Disclosure ◽  
The Internet ◽  
Cross Sectional ◽  
Market Participants ◽  
Dramatic Shift

Disclosure transparency is one of the pillars of good corporate governance. Moreover, the digital age has produced a dramatic shift in the corporate communication paradigm. As a result, companies increasingly use the Internet as a means of disseminating and disclosing financial information to shareholders, analysts and other interested capital market participants. This research examines the determinants of voluntary disclosure of financial information on the Internet by Brazilian firms. Cross-sectional analyses based on 291 non-financial companies listed on the São Paulo Stock Exchange in 2002 indicate that both firm size and the quality of corporate governance are positively related to the level of voluntary disclosure of financial information on the Internet. These results are consistent with the notion that Brazilian firms with incentives to improve financial transparency disclose more financial information on the Internet. Compared to similar Internet disclosures of U.S.-domiciled companies, this study finds that corporate governance is an incremental determinant of Internet financial disclosure for Brazilian enterprises

scholarly journals Corporate Governance Codes and Intellectual Capital: Evaluating the Performance Impacts among Government-Linked Companies in Malaysia and Singapore – A Panel Data Analysis

2021 ◽  
Vol 124 ◽  
pp. 08004
Author(s):  
Yen Wen Chang ◽  
Ng Ching Yat David ◽  
Suet Cheng Low ◽  
Peck Ling Tee
Keyword(s):  
Corporate Governance ◽  
Data Analysis ◽  
Panel Data ◽  
Intellectual Capital ◽  
Stock Exchange ◽  
Panel Data Analysis ◽  
Policy Makers ◽  
Corporate Governance Codes ◽  
The Government ◽  
The Impact

The objective of this study was to examine and compare the effects of corporate governance (CG) and intellectual capital (IC) between Malaysia Government-Linked Companies’ (M-GLCs) and Singapore Government-Linked Companies’ (S-GLCs) firm performance (FP). Panel data analysis was employed to analyse the impact of CG’s variables and IC’s variables on FP. FP was measured by Return on Total Assets (ROA), Tobin’s Q and Earnings Per Share (EPS). Data was gathered from the website of Bursa Malaysia and the Stock Exchange of Singapore from 2005 to 2018. The sample size of this research was 60 GLCs which comprised of 34 M-GLCs and 26 S-GLCs. There were a total 840 firm year observations. Results indicated that CGs of S-GLCs have greater impact on FP when compared to M-GLCs while the findings of the IC of M-GLCs have greater impact on FP compared to S-GLCs. This research was helpful in offering further insights of CG practices and IC efficiency to the Government, Board of Directors, policy makers, shareholders and stakeholders.

scholarly journals The effects of corporate governance mechanisms on the financial leverage–profitability relation

2019 ◽  
Vol 43 (4) ◽  
pp. 387-409
Author(s):  
Hanh Song Thi Pham ◽  
Duy Thanh Nguyen
Keyword(s):  
Corporate Governance ◽  
Panel Data ◽  
Emerging Market ◽  
State Ownership ◽  
Board Independence ◽  
Financial Leverage ◽  
Governance Mechanisms ◽  
Board Size ◽  
Content Type ◽  
Corporate Governance Mechanisms

Purpose This paper aims to investigate the moderating effects of corporate governance mechanisms on the financial leverage–profitability relation in emerging market firms. Design/methodology/approach The paper examines the impacts by estimating the empirical model in which a firm’s accounting profitability is a dependent variable, while financial leverage, board size, board independence, CEO duality, CEO ownership, state ownership and the interaction variables are predictors. The paper uses the panel data set of 295 listed firms in Vietnam in the period 2011-2015 and two key econometric methods for panel data, namely, the two-stage least square instrumental variable and general moments method. Findings The paper finds the evidence for the significant and positive effect of board size, board independence and state ownership on the financial leverage–profitability relation. The effect of CEO duality on the financial leverage–profitability relation tends to be negative, and the impact CEO ownership inclines to be positive, although both of them are statistically insignificant. The results are consistent across different estimation methods. Originality/value This paper is the first investigating the moderating effect of various corporate governance mechanisms on the financial leverage–profitability relationship in emerging market firms.

scholarly journals The Value of Board Diversity in the Relationship of Corporate Governance and Investment Decisions of Pakistani Firms

2020 ◽  
Vol 6 (4) ◽  
pp. 146 ◽  
Author(s):  
Nauman Iqbal Mirza ◽  
Qaisar Ali Malik ◽  
Ch Kamran Mahmood
Keyword(s):  
Corporate Governance ◽  
Positive Impact ◽  
Stock Exchange ◽  
Panel Data Analysis ◽  
Investment Decisions ◽  
Board Independence ◽  
Board Size ◽  
Board Diversity ◽  
The Impact ◽  
The Relationship

Inspired by the studies on the impact of diversity among decision-making groups, this study was carried out to examine whether the diversity of the members of the board of directors, encompassing gender, nationality, education, and experience, moderates the relationship between the corporate governance and investment decisions of listed companies of the Pakistan Stock Exchange. Furthermore, the determinants of investment decisions in the context of Pakistani firms’ are also explored. Panel data analysis techniques are used to gauge the cause and effect relationship among the variables. We find short-term liquidity and profitability are the determinants of Pakistani firms’ investment decisions, both having adverse relationships. Moreover, we explore board independence, and chief executive officer (CEO) duality has a significant positive impact on investment decisions. We further find that experience diversity strongly moderates the relationship between board independence and board size with investment decisions in the opposite direction. Education diversity moderates the relation of board size and investment decisions in the same direction. Foreign directors’ presence on the board also significantly moderates the relationship between board independence and investment decisions. The results of this empirical study confirm that board diversity moderates the relationship between corporate governance and investment decisions.

scholarly journals Antecedents of Firm’s Risk-play – A Structural Equation Modeling Approach in an Emerging Market Context

2021 ◽  
Vol 15 (2) ◽  
pp. 56-82
Author(s):  
Ranjan DasGupta ◽  
Rashmi Singh
Keyword(s):  
Corporate Governance ◽  
Risk Taking ◽  
Structural Equation ◽  
Emerging Market ◽  
Capital Intensity ◽  
Empirical Literature ◽  
Equation Modeling ◽  
Firm Risk ◽  
Managerial Risk ◽  
Income Stream

Firm-risk and managerial risk-taking though distinct are used interchangeably in empirical literature. Here, we identify these two distinctly by examining different proxies for them. We use income stream uncertainty and accounting beta to proxy firm-risk, and market risk and capital intensity ratio represent managerial risk-taking. Once defined, our objective is to find the antecedents of both these by using the most advanced structural equation modelling (SEM) approach from created constructs of performance, psychological, corporate governance, shareholding patterns, fundamental valuation and firm’s characteristics drivers. We formulate seven hypotheses based on empirical literature representing these constructs. We use data of 269 Indian firms for 18 (1999-2017) years to run SEM and then analyse our results individually and combinedly. SEM is used here to test the unidimensionality of the seven constructs (consisting of 19 drivers) and to analyze these drivers (i.e. antecedents) influence on firm-risk and managerial risk-taking i.e. firm’s risk-play. Results prove that present firm-performance, corporate governance drivers, promoters’ shareholding and firm’s characteristics are driving firm’s risk-play. However, fundamental valuation drivers have no role to play in influencing income stream uncertainty, systematic operating risks and managerial risk-attitudes. Psychological drivers and foreign shareholdings act only as a catalyst of firm-risk.

scholarly journals Planos de Opções de Compra de Ações e o Valor das Companhias Brasileiras

2012 ◽  
Vol 10 (1) ◽  
pp. 105
Author(s):  
Fernanda Finotti Cordeiro Perobelli ◽  
Bruno De Souza Lopes ◽  
Alexandre Di Miceli da Silveira
Keyword(s):  
Corporate Governance ◽  
Data Analysis ◽  
Panel Data ◽  
Best Practices ◽  
Stock Price ◽  
Stock Options ◽  
Stock Exchange ◽  
Panel Data Analysis ◽  
Employee Stock Options ◽  
Exercise Price

This work investigates the effects of Employee Stock Options Plans (ESOP) on the value of companies in the Brazilian Stock Exchange (BM&FBOVESPA). An ESOP is a mechanism of variable compensation, generally offered to executives, having the alignment of interests between managers and shareholders as one of its goals. To achieve this purpose, a panel data analysis was used in order to try measuring if the ESOP generated or not value to shareholders. The results show that there is evidence that the ESOP only generates wealth for shareholders when it is well-set, specifically when the exercise price is fixed at-money or out-of-money. An increase in the stock price is also achieved when companies adopt best practices of corporate governance and the ESOP by more than three years.

scholarly journals CORPORATE GOVERNANCE, CAPITAL STRUCTURE, AND CORPORATE INVESTMENT: AN EMPIRICAL STUDY ON PROPER MANUFACTURING INDUSTRY IN INDONESIA

2021 ◽  
Vol 19 (1) ◽  
pp. 130-140
Author(s):  
Gilda Maulina ◽  
◽  
Nila Firdausi Nuzula ◽  
Cacik Rut Damayanti ◽  
◽  
...  
Keyword(s):  
Corporate Governance ◽  
Capital Structure ◽  
Structural Equation ◽  
Manufacturing Industry ◽  
Stock Exchange ◽  
Corporate Investment ◽  
Equation Modeling ◽  
Environmental Programs ◽  
Units Of Analysis ◽  
The Capital Structure

Investment is one of the most crucial decisions that a company must create to achieve higher financial performance and to maintain long-term sustainability. This study predicts that two significant factors determine corporate investment, i.e., the firms’ corporate governance and capital structure. The article also assumes that companies that are aware and engage in environmental programs would find it much easier to gain investors’. This study used 39 units of analysis of 13 manufacturers listed on the Indonesia Stock Exchange that received a good ranking in PROPER during the 2016-2018 period and analyzed with structural equation modeling (SEM). This study finds that corporate governance is negatively related to the capital structure but positively related to corporate investment. However, the capital structure does not affect corporate investment implying environmental performance’s significance in leading corporate governance and enhancing corporate investment. Further research can extend the observation period, use other sectors as the sample, use the different indicators in each variable, and develop the relationship between variables on a broader framework.

scholarly journals ANALISIS FAKTOR –FAKTOR YANG MEMPENGARUHI KEPUTUSAN INVESTASI PADA PERUSAHAAN PERTAMBANGAN LOGAM DAN MINERAL YANG TERDAFTAR DIBURSA EFEKINDONESIA

2020 ◽  
Vol 3 (2) ◽  
pp. 283-288
Author(s):  
Eko Deswin Miechaels Siringo-Ringo ◽  
Keyword(s):  
Panel Data ◽  
Time Series Data ◽  
Stock Exchange ◽  
Investment Decision ◽  
Investment Decisions ◽  
Series Data ◽  
Net Income ◽  
Mineral Mining ◽  
Mining Companies ◽  
Inventory Turnover

his study aims to analyze whether Net Profit, Leverage, Liquidity, Inventory Turnover, and Profitability have an influence on investment decisions of metal and mineral mining companies listed on the Indonesia Stock Exchange during 2018 and 2019. The population in this study are metal and mineral mining companies. listed on the Indonesia Stock Exchange, amounting to 11 companies. And 7 metal and mineral mining companies in this study were used as samples. Sources of data used in this study are secondary data, the data used are the financial statements of metal and mineral mining companies sampled obtained through the Indonesia Stock Exchange published on the website www.idx.co.id. The analytical method used in analyzing the data in this study is panel data regression analysis. The sampling method used is the panel data method which is a combination of cross section data and time series data. The independent variables in this study are Net Income, Leverage, Liquidity, Inventory Turnover, Profitability, and thedependent variable namely Investment Decision. The results of this study indicate that Leverage,and Profitabilityhave a positive effect on Investment Decisions,Liquidity, and Inventory Turnover, while Net Income has a negative effect on Investment Decisions.Keywords: Investment Decision, Net Income, Leverage,Liquidity, Inventory Turnover, and Profitability

scholarly journals Corporate governance and financial performance of listed companies: A case of an emerging market

2021 ◽  
Vol 5 (3) ◽  
pp. 8-17
Author(s):  
Emmanuel Selase Asamoah ◽  
Albert Puni
Keyword(s):  
Corporate Governance ◽  
Financial Performance ◽  
Performance Indicator ◽  
Stock Exchange ◽  
Emerging Market ◽  
Target Population ◽  
Governance Structure ◽  
Tobin’S Q ◽  
Tobin's Q ◽  
A Performance

Corporate financial performance (CFP) is a key benefit that comes with the adoption and implementation of a good corporate governance structure in organizations. The objective of this paper is to analyze the effect of the six (6) broad corporate governance structures (board composition, board committees, separation of CEO/chairman, size of board, number of board meetings held, and shareholder concentration) on CFP measured by ROA, ROE, EPS, and Tobin’s Q among Ghanaian companies. The target population for the study was the companies that were listed on the Ghana Stock Exchange (GSE) for the period 2015–2020 and purposive sampling methods were deployed in the sample selection. The study found that using ROA as a performance indicator, corporate governance variables affected CFP by 18.95% whilst it influenced ROE by 29.71%. Additionally, corporate governance mechanisms impacted EPS by 52.53% when it was used as a performance indicator and 18.01% when Tobin’s Q was the performance index. The paper concludes that companies that implement the corporate governance guidelines on best practices stand a better chance of enhancing CFP especially with performance targets that integrate shareholder value maximization.

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