scholarly journals PRACTICING FRS AND AUDIT QUALITY SUPPORT FINANCIAL SUCCESS OF CONSTRUCTION FIRMS IN MALAYSIA

2016 ◽  
Vol 1 (1) ◽  
Author(s):  
Chia Hua Sim ◽  
Daw Tin Hla ◽  
Abu Hassan Md.Isa
Keyword(s):  
Firm Performance ◽  
Panel Data ◽  
Financial Reporting ◽  
Audit Quality ◽  
Positive Impact ◽  
Panel Data Analysis ◽  
Financial Success ◽  
Reporting Standard ◽  
Construction Firms ◽  
The Impact

Prior research findings on the effect of financial reporting and audit quality on firm performance were mixed. The current study therefore, sought to examine the impact of audit quality and FRS practices of firms on their financial success. Samples firms listed on Malaysian stock market were selected from the construction sector for the period of 2010 to 2013. Data was collected from the published annual reports and notes to the financial statements. To assess the level of compliance with the regulations and provisions of the Financial Reporting Standard (FRS) in Malaysia, content analysis was carried out. Firm’s engagement with established audit firm is used as a proxy for audit quality, and return on assets is used as a measure of firm performance. Panel data analysis was employed in analysing the data and testing the stated hypotheses. The use of panel data reveals that practices of FRS by firms is significantly and positively related to their financial performance. The results also indicate that audit quality has a significant positive impact on business financial success. The study therefore recommends that the management of listed construction firms improve their practices of FRS and employ the service of established audit firms in support of financial success. Regular training may be organised to provide construction companies with practical guide for better compliance with the FRS in Malaysia.  

scholarly journals Determinants of Basmati Exports from Pakistan: A Panel Data Analysis

2021 ◽  
Vol 3 (1) ◽  
pp. 12-18
Author(s):  
Muhammad Munwar Hayat ◽  
Raheela Khatoon
Keyword(s):  
Panel Data ◽  
Method Of Moments ◽  
Negative Impact ◽  
Positive Impact ◽  
Panel Data Analysis ◽  
Generalized Method Of Moments ◽  
Trading Partner ◽  
Dummy Variable ◽  
Export Competitiveness ◽  
The Impact

This paper aims to estimate the impact of different factors of basmati exports from Pakistan to its trading partner. Results are obtained by using the Generalized Method of Moments (GMM) model and panel data methodology with a sample of 22 countries for the period of 2003-2019. To estimate the impact of different variables on basmati exports Generalized Method of Moments (GMM) model is used on the panel dataset. The results revealed that the inflation rate of Pakistan has a negative and significant effect on the export competitiveness of Pakistani basmati. The exchange rate of Pakistan has a positive and significant impact on the basmati export, the population of Pakistan has a negative and significant impact on basmati export. Basmati production in Pakistan also has a significant and negative impact on basmati export. The Gross Domestic Product (GDP) of Pakistan has a significant and positive impact on the basmati export while the GDP of the trading partner has a significant and negative impact on the basmati export. The dummy variable for joint border also has a positive and significant impact on basmati exports of Pakistan.

scholarly journals Product diversification and large construction firm productivity: the effect of institutional environments in Malaysia

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Mohd Azrai Azman ◽  
Carol K.H. Hon ◽  
Bo Xia ◽  
Boon L. Lee ◽  
Martin Skitmore
Keyword(s):  
Firm Performance ◽  
Positive Impact ◽  
Product Diversification ◽  
Content Type ◽  
Construction Firms ◽  
Unrelated Diversification ◽  
Construction Firm ◽  
Related Diversification ◽  
Generalised Method Of Moments ◽  
The Impact

PurposeMany large construction firms (LCFs) adopt product diversification (PD) to counter downturns and spread risks. However, no detailed information is available concerning the type of PD that improves their performance. In addition, it is still uncertain how much changes in institutional dimensions influence the effectiveness of PD. Therefore, the aim is to resolve this issue by establishing a model that shows the extent of this influence.Design/methodology/approachThe generalised method of moments (GMM) estimator is used to model the PD strategies of 86 LCFs in Malaysia over 14 years (2003–2016) and its impact on productivity and profitability performance.FindingsUnrelated diversification (UD) decreased firm performance in 2003–2016, while related diversification (RD) had a positive impact during the more liberal 2010–2016 phase. The models show that the impact of PD is highly dependent on changes in institutional dimensions.Practical implicationsFirstly, managers may adjust the type of PD and its level of diversification to improve firm performance. Secondly, they may devise PD strategies based on changes in institutional dimensions to maximise their effectiveness.Originality/valueThe study contributes to the literature by determining the optimal amount of PD (including RD and UD) and its impact on performance. Secondly, the study is the first to investigate the moderating relationship of the institutional dimensions of economic and regulatory institutions on PD-firm performance. Thirdly, the study is the first to explore the components of technical-scale-scope economies (movement towards and around the production frontier), this being crucial to the strategy that was only conjectured in previous studies.

scholarly journals The Effect of Audit Quality on Firm Performance: A Panel Data Approach

2019 ◽  
Vol 9 (1) ◽  
pp. 229 ◽  
Author(s):  
May M. Elewa ◽  
Rasha El-Haddad
Keyword(s):  
Firm Performance ◽  
Panel Data ◽  
Audit Quality ◽  
Panel Data Analysis ◽  
Random Effect ◽  
Random Effect Model ◽  
Auditor Independence ◽  
Return On Equity ◽  
Financial Firms ◽  
Big 4

This study attempts to examine the effect of audit quality on firm performance. It uses financial statements of non-financial firms listed as EGX 100. The population studied consists of thirty non-financial firms. The study covers a five year period 2010-2014. It applies panel data analysis. Independent Variables are Auditor Experience (measured by Big-4) and Auditor Independence (measured by auditor Rotation ROT). Dependent Variables are Return on Assets ROA and Return on Equity ROE. In accordance with the Random Effect Model results, BIG 4 and ROT have an insignificant impact on the ROA and ROE of the firm. External and internal financial statement users may benefit from the study only when dealing with high-profit firms.

scholarly journals The Relationship between Competitiveness and Economic Growth: A Panel Data Analysis on Selected Countries

2015 ◽  
Author(s):  
Ziya Çağlar Yurttançıkmaz ◽  
Ömer Selçuk Emsen ◽  
Ahmet Fatih Aydemir ◽  
Ahmet Alkan Çelik
Keyword(s):  
Economic Growth ◽  
Data Analysis ◽  
Panel Data ◽  
Positive Impact ◽  
Panel Data Analysis ◽  
Sustainable Growth ◽  
International Institute ◽  
Data Set ◽  
Business World ◽  
The Impact

As economic growth is very important for the development of individuals and the society, the importance of capital stocks and labor force for the economic growth of countries cannot be neglected. Additionally, the human capital component and especially the role of competitiveness increases on the growth process have been extensively discussed over the last two decades. This paper examines the impact of competitiveness increases on economic growth of selected middle-income countries including Turkey for the period of 1997-2012 using a balanced panel data analysis, which was relatively less studied in the literature. According to analysis results, an increase on the competitiveness index of countries in the panel, which were obtained from the data set of the International Institute for Management Development (IMD), positively increases per capita income level. This result may be interpreted as several factors that increase competitiveness including infrastructure, economic structure, business world and regulations and investments that ensure public efficiency may have a positive impact on economic growth. Therefore, this study suggests that future policies that concentrate on extensive growth instead of intensive dimension may contribute to efficient and sustainable growth.

scholarly journals The Effect of IAS-24 Disclosures on Governance Mechanisms and Ownership Structures in Pakistan

2016 ◽  
Vol 5 (1) ◽  
pp. 15-36
Author(s):  
Abdul Rafay Abdul Rafay ◽  
Ramla Sadiq ◽  
Mobeen Ajmal
Keyword(s):  
Corporate Governance ◽  
Firm Performance ◽  
Financial Reporting ◽  
Negative Impact ◽  
Positive Impact ◽  
Stock Exchange ◽  
Institutional Ownership ◽  
Governance Mechanisms ◽  
Ownership Structures ◽  
The Impact

IAS-24 of the International Financial Reporting Standards focuses on the concept and disclosures of related party transactions (RPTs) for a reporting entity. This study examines the interrelationship between RPTs (as disclosed under IAS-24), agency theory, ownership structures and firm performance. Our sample includes nonfinancial companies indexed by the KSE-100 of the Pakistan Stock Exchange during 2006–15. To run the regression models, we determine the regression assumptions, normality, heteroskedasticity, autocorrelation and multicollinearity. We investigate the impact of different RPTs, including cash inflows and outflows, whereas other studies generally look at the impact of RPTs on firm performance in totality. The empirical analysis suggests that institutional ownership has a positive, significant impact on firm performance. Related party purchases have a significant, negative impact on performance, resulting in the expropriation of institutional ownership. RPTs that generate revenues have a significant, positive impact on performance, such that institutional ownership has a propping-up effect with respect to the related parties. In practice, institutional ownership leads to strong corporate governance and contributes to firm performance. While other studies find family ownership responsible for the expropriation effect, we argue that institutional ownership has a propping-up and expropriation effect on related parties. Our study also suggests that certain ownership structures lead to weaker corporate governance mechanisms, resulting in greater agency problems. This, in turn, badly affects company performance and leads to the exploitation of minority shareholders.

scholarly journals Does the use of hedge derivatives improve the credit ratings of Brazilian companies?

2020 ◽  
Vol 31 (82) ◽  
pp. 50-66
Author(s):  
Rafael Moreira Antônio ◽  
Marcelo Augusto Ambrozini ◽  
Vinícius Medeiros Magnani ◽  
Alex A. T. Rathke
Keyword(s):  
Financial Reporting ◽  
Panel Data Analysis ◽  
Credit Ratings ◽  
Assessment Process ◽  
Financial Instruments ◽  
Reporting Standard ◽  
International Financial Reporting Standard ◽  
Publicly Traded Companies ◽  
Rating Agencies ◽  
The Impact

ABSTRACT The purpose of this study is to identify the factors that may explain the attribution of credit ratings to firms, focusing especially on the impact of derivatives. The gap explored by this research lies in the novelty of analyzing how rating agencies perceive the effects caused by information related to derivatives use by Brazilian publicly-traded companies. In addition, this study shifts the previous findings from stock analysts to rating agencies, reinforcing the discussion about the complexity of derivatives in the credit risk assessment process. This research topic is currently of interest due to the adoption of International Financial Reporting Standard (IFRS) 9 (Accounting Pronouncements Committee - CPC - 48), which came into effect in January of 2018. Based on these rules, the main novelty presented in this article was its verification of the effect of the derivatives used by companies in order to hedge their credit ratings, thus helping to fill the empirical gap that exists in the literature from the area. The results found challenge the theory that the use of hedge derivatives is viewed positively by investors. However, although no significant statistical impact was found on the ratings of companies that use derivatives, it was observed that the companies that use derivatives and have the highest notional values were those that received the best ratings from Moody’s. With this we broadened the debate about the complexity of the information linked to derivatives use. In the study, 2,090 ratings attributed to non-financial companies with stocks traded on the Brasil, Bolsa, Balcão [B]³ exchange were examined between 2010 and 2016 by using panel data analysis, which lends robustness to the analysis and findings. Contrary to the central hypothesis of this research, the results presented here show that, in Brazil, companies that use derivative financial instruments for hedging do not receive the best credit ratings from rating agencies. One of the main contributions of this study is the evidence that Standard & Poor’s and Moody’s were unable to consistently incorporate information related to derivatives use, thus broadening the discussion about the complexity of these financial instruments.

scholarly journals A Panel Data Analysis Model to Assess the Impact of Institutional Factors on Crop Diversification of Assam, India

2020 ◽  
Vol 9 (6) ◽  
pp. 167-173
Keyword(s):  
Panel Data ◽  
Negative Impact ◽  
Positive Impact ◽  
Panel Data Analysis ◽  
Value Added ◽  
Institutional Factors ◽  
Macro Level ◽  
Farm Size ◽  
Crop Diversification ◽  
The Impact

The process of crop diversification is generally used in agriculture to mitigate both production and price risk. Crop diversification is a process through which farmers diversify his farm activities from one crop to different value added crops so that he minimizes the existing risk in his farm operation. Most of the studies in literature in context to crop diversification have identified different factors that influence crop diversification in their study area. However, very few studies have attempted to examine the impact of institutional factors on crop diversification at macro level by using district level panel data in Assam. Therefore, this study makes an attempt to examine the impact of institutional factors on crop diversification through panel analysis. To fulfill the objective of this paper secondary data have been collected from different issues of Statistical Hand Book of Assam, assamstate.com, RBI, etc. The overall results of this paper show that institutional factors like farm size have positive impact on crop diversification except institutional credit. Institutional credit has negative impact on crop diversification. This paper will definitely help to bring some policy changes in the macro level to optimize crop diversification in the region.

scholarly journals The Impact of Female Directors on Board, and Female CEO on Firm Performance: Empirical Evidence from Emerging Economy

2021 ◽  
Vol 7 (3) ◽  
pp. 711-723
Author(s):  
Muhammad Tasnim Khan ◽  
Sania Sarfraz ◽  
Muhammad Husnain
Keyword(s):  
Firm Performance ◽  
Panel Data ◽  
Panel Data Analysis ◽  
Random Effect ◽  
Level Control ◽  
Corporate Leadership ◽  
Female Directors ◽  
Female Ceos ◽  
Leadership Structure ◽  
The Impact

Purpose: As per agency theory prospective, board gender diversity enhances the corporate leadership structure which mitigates agency conflicts among stakeholders. Therefore, this study investigates the impact of female directors on board, and female CEOs on firm performance. We also uses board size, and board independence as board level control, while leverage, firm size, capital expenditure & tangibility as firm level control. Design/Methodology/Approach: The study uses a panel data starting from 2005 to 2020 on annual basis. To resolve endogeneity and unobserved heterogeneity problems in panel data analysis, study uses static (fixed effect, & random effect) and dynamic (GMM) estimation techniques in Pakistan. Findings: Result shows the positive impact of female directors on board and female CEOs on firm performance. These findings are robust under alternative measures of firm performance. Implications/Originality/Value: The study suggests that female representation and female CEOs are the important attributes to enhance firm performance. Additionally, females are performing a significant role through monitor and control for excellent corporate leadership structure. Furthermore, this is the first study of its kind which analyzes this relationship in the emerging equity market of Pakistan. 

scholarly journals Board of Directors and Financial Reporting Quality in Vietnam Listed Companies

2020 ◽  
Vol 11 (4) ◽  
pp. 296 ◽  
Author(s):  
Nguyen Thi Thanh Phuong ◽  
Dang Ngoc Hung
Keyword(s):  
Board Of Directors ◽  
Financial Reporting ◽  
Audit Quality ◽  
Negative Impact ◽  
Positive Impact ◽  
Reporting Quality ◽  
Listed Companies ◽  
Financial Reporting Quality ◽  
Research Results ◽  
The Impact

This article studies the impact of the Board of Directors (BOD) on financial reporting quality (FRQ) in Vietnam listed companies. The research uses FEM, REM and GLS regression models, data collected at energy enterprises listed on the stock market in Vietnam from 2010 - 2018, with 2162 observations. The research results have found that the BOD size, BOD independence, BOD chairperson cum CEO has a positive impact on FRQ while BOD meeting frequency has a negative impact on FRQ. In addition, the audit quality, the ratio of liabilities has a positive impact on FRQ while company size has a negative impact on FRQ. Further, the percentage of female BOD members does not have an impact on FRQ. Empirical research results serve as a useful basis for enterprises to improve FRQ by considering of factors of the board of director in a more effective manner.

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