scholarly journals The Linkage between the Degree of Compliance with Corporate Governance Rules and Profitability: Evidence from Palestine Exchange Listed Firms

2016 ◽  
Vol 9 (1) ◽  
pp. 31
Author(s):  
Naser Abdelkarim
Keyword(s):  
Corporate Governance ◽  
Positive Impact ◽  
Cost Management ◽  
Market Value ◽  
Theoretical Assumption ◽  
Listed Firms ◽  
Developed Economies ◽  
Governance Indicators ◽  
Code Of Corporate Governance ◽  
The Relationship

<p>The underlying objective of this study is to empirically investigate the relationship between the degree of compliance with the rules of the code of Corporate Governance (CG) that became effective in 2009 and profitability of Palestine Exchange Listed firms. Compliance with CG rules is measured based on a criteria of ten corporate governance indicators identified in the study of Abdelkarim and Ijbarah (2010), while profitability is measured by the percentage of change in ROI reported in year 2008 and its average over the period 2009-2015. The Use of ROI as a dependent variable in this study is based on the theoretical assumption that CG should have positive impact on efficiency in terms of cost management and increase in sales due to increase in market share. Prior research in developed economies reported a significant impact of corporate governance on firm performance particularly if measured as a change in market value. However, in Palestine there was only one study that investigated the relationship between corporate governance measured as the level of ownership concentration and firm’s performance measured using Tobin’s Q (Abdelkarim and Alawneh, 2005).</p><p>Using regression analysis, this study provides empirical evidence that there is no statistically significant relationship between the degree of compliance with the rules in the code of corporate governance and profitability of sample firms. Explanations for this key finding are provided in this study.</p><p> </p>

scholarly journals Market concentration, corporate governance and innovation: Partial and combined effects in US-listed firms

2012 ◽  
Vol 1 (3) ◽  
pp. 199-215
Author(s):  
Mehmet Ugur ◽  
Nawar Hashem
Keyword(s):  
Corporate Governance ◽  
Robust Estimation ◽  
Market Concentration ◽  
Combined Effects ◽  
Cross Sectional ◽  
Book Value ◽  
Listed Firms ◽  
Innovation Research ◽  
Governance Indicators ◽  
The Relationship

Existing research on the relationship between market concentration and innovation has produced conflicting findings. In addition, the emerging literature on the relationship between corporate governance and innovation tends to focus only on partial effects of corporate governance on innovation. We aim to contribute to the debate by investigating both partial and combined effects of corporate governance and market concentration on innovation. Utilising a dataset for 1,400 non-financial US-listed companies and two-way cluster-robust estimation methodology, we report several findings. First, the relationship between market concentration and innovation is non-linear. Secondly, the relationship has a U-shape in the case of input measure of innovation (research and development - R&D – expenditures); but it has an inverted-U shape when net book-value of brands and patents is used as output measure of innovation. Third, corporate governance indicators such as anti-takeover defences and insider control tend to have a negative partial effect on R&D expenditures but a positive partial effect on net book-value of brands and patents. Finally, when interacted with market concentration, anti-takeover defences and insider control act as complements to market concentration. Hence, firms with strong anti-take-over defences and under insider control tend to spend more on R&D but are less able to generate valuable brands and patents as market concentration increases. These results are based on two-way cluster-robust estimation, which takes account of both serial and cross-sectional dependence in the error terms.

Is Voluntary Disclosure Value Relevant? Evidence from Top Listed Firms in India

2021 ◽  
pp. 097226292098629
Author(s):  
Rupjyoti Saha ◽  
Kailash Chandra Kabra
Keyword(s):  
Voluntary Disclosure ◽  
Value Relevance ◽  
Stock Exchange ◽  
Market Value ◽  
Policy Implications ◽  
Positive Contribution ◽  
Listed Firms ◽  
Strategic Disclosure ◽  
Relevant Evidence ◽  
The Relationship

In view of ongoing reforms in India with emphasis on improving transparency of corporate, the present study aims to examine the influence of voluntary disclosure on the market value of India’s top-listed firms. To this end, the study uses a sample of top 100 non-financial and non-utility firms listed at Bombay Stock Exchange based on market capitalization over a 5-year period (2014–2018). To control potential endogeneity in the relationship between voluntary disclosure and firms’ market valuation, fixed effect panel data model and two-stage least squares model of estimation have been employed. The result obtained from the analysis suggests that enhanced level of voluntary disclosure significantly improves the market value of sample firms. The study further undertakes additional analysis by categorizing voluntary disclosure into its sub-components wherein the findings reveal that three components of voluntary disclosure such as corporate and strategic disclosure, forward looking disclosure and corporate governance disclosure make positive contribution towards market value of firms, while the remaining components of voluntary disclosure such as human and intellectual capital disclosure and financial and capital market disclosure do not appear to have any significant influence on the same. Overall, the finding suggests that voluntary disclosure made by sample firms is considered relevant by investors. However, value relevance of different components of voluntary disclosure varies with the nature and extent of information disclosed. The study offers some important policy implications.

Audit committee characteristics and the moderating effect of Malaysian code of corporate governance on IPO liquidity

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Amal Mohammed Al-Masawa ◽  
Rasidah Mohd-Rashid ◽  
Hamdan Amer Al-Jaifi ◽  
Shaker Dahan Al-Duais
Keyword(s):  
Corporate Governance ◽  
Initial Public Offerings ◽  
Audit Committee ◽  
Ordinary Least Squares ◽  
Moderating Effect ◽  
Least Squares Regression ◽  
Content Type ◽  
Code Of Corporate Governance ◽  
The Impact ◽  
The Relationship

Purpose This study aims to investigate the link between audit committee characteristics and the liquidity of initial public offerings (IPOs) in Malaysia, which is an emerging economy in Southeast Asia. Another purpose of this study is to examine the moderating effect of the revised Malaysian code of corporate governance (MCCG) on the link between audit committee characteristics and IPO liquidity. Design/methodology/approach The final sample consists of 304 Malaysian IPOs listed in 2002–2017. This study uses ordinary least squares regression method to analyse the data. To confirm this study’s findings, a hierarchical or four-stage regression analysis is used to compare the t-values of the main and moderate regression models. Findings The findings show that audit committee characteristics (size and director independence) have a positive and significant relationship with IPO liquidity. Also, the revised MCCG positively moderates the relationship between audit committee characteristics and IPO liquidity. Research limitations/implications This study’s findings indicate that companies with higher audit committee independence have a more effective monitoring mechanism that mitigates information asymmetry, thus reducing adverse selection issues during share trading. Practical implications Policymakers could use the results of this study in developing policies for IPO liquidity improvements. Additionally, the findings are useful for traders and investors in their investment decision-making. For companies, the findings highlight the crucial role of the audit committee as part of the control system that monitors corporate governance. Originality/value To the authors’ knowledge, this work is a pioneering study in the context of a developing country, specifically Malaysia that investigates the impact of audit committee characteristics on IPO liquidity. Previously, the link between corporate governance and IPO liquidity had not been investigated in Malaysia. This study also contributes to the IPO literature by providing empirical evidence regarding the moderating effect of the revised MCCG on the relationship between audit committee characteristics and IPO liquidity.

IMPACT OF CORPORATE GOVERNANCE ON FIRM PERFORMANCE: EVIDENCE FROM PAKISTAN

2021 ◽  
Vol 02 (01) ◽  
pp. 16-28
Author(s):  
Feryal Zafar ◽  
Shaheera Munir ◽  
Muhammad Saqib Khan
Keyword(s):  
Corporate Governance ◽  
Decision Makers ◽  
Annual Reports ◽  
Board Independence ◽  
Negative Effects ◽  
Research Issues ◽  
Listed Firms ◽  
Analysis Technique ◽  
Dependent Variables ◽  
The Relationship

The study attempts to figure out the relationship between the performance of the firms and corporate governance in Pakistan. Governance mechanisms used in this study are CEO duality, Independence of Board, Size of Board, and Ownership Concentration. While, the ROA and ROE have been used as dependent variables to measure the performance of firms. Using regression analysis technique on 10 listed firms trading over four years from 2014-2017, the results have been derived. The data regarding all the variables have been collected from all the companies’ annual reports. The discoveries of the study direct that fundamentals of corporate governance such as the Size of the Board, Ownership, and Duality Concentration of CEO have negative effects on performance of organization, as measured by ROA and ROE. While Board independence positively affects the performance of firms. The results are thus significant and provide valuable information for the decision makers about the research issues under consideration.

scholarly journals Performance, corporate governance and new regulation

2017 ◽  
Vol 9 (18) ◽  
Author(s):  
Heriberto García
Keyword(s):  
Corporate Governance ◽  
Financial Performance ◽  
Financial Market ◽  
Information Disclosure ◽  
Potential Growth ◽  
Listed Firms ◽  
Risk Return ◽  
Corporate Governance Code ◽  
Governance Practices ◽  
The Relationship

Abstract. After the adoption of the Corporate Governance Code (Code) in Mexico, many companies increased financial performance and the leveraged during the following five years; we investigated the effect of how those firms improved the corporate governance practices and how was translated into better risk return company. We analyzed how and where better corporate governance practices affects performance and what was the relationship with Transparency, New Regulation and Governance Practices. Also we explored the gaps between transparency and information disclosure of Mexican Firms listed in U.S stockexchange and non U.S listed firms our findings were related to the potential growth of the Mexico Financial Market, Law and Finance.Keywords: corporate governance, financial performance, regulationResumen. Después de la adopción del Código de Gobierno Corporativo en México, algunas compañías incrementaron el desempeño financiero y el uso de deuda durante los siguientes cinco anos, nuestra investigación se enfoca en como dichas compañías mejoraron sus prácticas de gobierno corporativo y como estas prácticas se han traducido en un mejor relación de riesgo y rendimiento. En esta investigación exploramos cómo y en dónde mejores prácticas de gobierno corporativo afectan el desempeño y qué relación tiene con laTransparencia, Nuevas Regulaciones y prácticas de Gobierno Corporativo. Con lo anterior también identificamos aquellas compañías que cotizan fuera de México para identificar potenciales diferencias en dichas prácticas.Palabras clave: desempeño financiero, gobierno corporativo, regulación

scholarly journals Improving governance leads to improved corporate communication

2008 ◽  
Vol 5 (4) ◽  
pp. 26-33 ◽  
Author(s):  
Poh-Ling Ho ◽  
Gregory Tower ◽  
Dulacha G. Barako
Keyword(s):  
Corporate Governance ◽  
Voluntary Disclosure ◽  
Positive Impact ◽  
Governance Structure ◽  
Corporate Communication ◽  
Governance Reform ◽  
Corporate Governance Structure ◽  
Listed Firms ◽  
Corporate Change ◽  
Regulatory Reforms

Significant changes and reforms have been initiated around the world and in a Malaysian context with the aim of enhancing corporate governance and transparency. The nature of these regulatory reforms clearly impacted on firm management’s incentives to disclose information voluntarily. This study empirically examines the influence of corporate governance structure on voluntary disclosure practices of Malaysian listed firms from 1996 to 2001. This important timeframe encompasses the time period before the Asian Financial Crisis and the aftermath of regulatory reforms such as the revamped KLSE Listing Requirement released in 2001, widely recognized as a major milestone in Malaysian corporate governance reform through the enhanced corporate disclosure. Our findings show that the extent of voluntary communication is generally low, albeit showing an increase from 1996 to 2001. There is an increase in the number of corporate governance characteristics adopted by firms, suggesting firms exhibiting an improvement in the corporate governance structure. While corporate governance structure is not a significant explanatory variable in 1996, our results suggest that a firm’s corporate governance structure has a significantly positive impact on voluntary disclosure in 2001. Large companies voluntarily disclose more information in both years. The implications are that a greater focus on corporate governance is resulting in an increase in transparency in the Malaysian setting. Corporate change is generating better corporate communication

scholarly journals Measuring institutional respect and State capacities in South America. A relational analysis on four dimensions of the Worldwide Governance Indicators (2017-2018)

AWARI ◽  
2020 ◽  
Vol 1 (1) ◽  
Author(s):  
Nicolás Vladimir Chuchco
Keyword(s):  
South America ◽  
Good Governance ◽  
Private Companies ◽  
International Investments ◽  
Four Dimensions ◽  
Developed Economies ◽  
Governance Indicators ◽  
The World Bank ◽  
Relationship Network ◽  
The Relationship

The measurement of “good governance” has become an object of (e) valuation by international actors. In this regard, it has occupied the attention of investors, donors, private companies, development agencies, academics, journalists, governments, and credit organizations in the last 30 years, accompanied by a greater flow of international investments to under developed economies. Among these indicators, the Worldwide Governance Indicators (WGI) produced by the World Bank stand out. Although these numbers are not used directly by the Bank to condition resources, they are used by organizations such as the Millennium Challenge Corporation (MCC) to decide in which countries allocate financial aid based on the results of some of the dimensions of these indicators. For this reason, this work seeks to investigate the relationships networks that exist between the indicators and the organizations that participate in providing data, asking about what type of organizations produce inputs of certain dimensions, what relationships they have with each other and with others, in terms of participation, and where the central houses that produce these inputs are located geographically. For this, we have analyzed and characterized the relationship network of production about four dimensions of the WGI indicators, according to the organizations that provided data for South America during the period 2017-2018. The main results obtained indicate that a small number of international organizations in the Northern hemisphere have greater participation in the supply of inputs, highlighting private companies or organizations linked to them.

scholarly journals Corporate governance and performance of listed commercial banks in South Africa

2014 ◽  
Vol 11 (2) ◽  
pp. 677-687
Author(s):  
Sam Ngwenya
Keyword(s):  
South Africa ◽  
Corporate Governance ◽  
Commercial Banks ◽  
Global Financial Crisis ◽  
The United States ◽  
Executive Directors ◽  
Governance Indicators ◽  
And Performance ◽  
The Global Financial Crisis ◽  
The Relationship

The global financial crisis of 2008 that resulted in the collapse of many financial institutions in the United States (US) and Europe have resulted in debates over the failures of corporate governance structures to properly protect investors. The main objective of the study was to determine the relationship between corporate governance and performance of listed commercial banks in South Africa. The results of the study indicated a statistically positive significant relationship between board size, proportion of non-independent and non-executive directors and bank performance. The results of the rest of the corporate governance indicators are mixed when using different performance measurement variables.

Audit Committee Characteristics and Earnings Quality

2020 ◽  
pp. 23-49
Author(s):  
Fatima Albedal ◽  
Allam Mohammed Hamdan ◽  
Qasim Zureigat
Keyword(s):  
Corporate Governance ◽  
Audit Committee ◽  
Earnings Quality ◽  
Listed Companies ◽  
Independent Variables ◽  
Pooled Data ◽  
Data Regression ◽  
Code Of Corporate Governance ◽  
The Relationship

This chapter investigates the relationship between the audit committee and earnings quality of listed companies in Bahrain Bourse and to examine whether those companies comply with the obligatory code of corporate governance. The sample of this study includes 40 companies listed in Bahrain Bourse for the period 2013-2017. The model of the study tested the relationship between the independent variables of audit committee characteristics and the dependent variable of earnings quality using pooled data regression. The findings of the study showed that the Bahraini listed companies comply and follow the code of corporate governance and some audit committee characteristics have an impact on earnings quality.

scholarly journals Impact of Corporate Governance on Firms’ Financial Flexibility in the Emerging Economy: Evidence From Bangladesh

2019 ◽  
Vol 9 (4) ◽  
pp. 183
Author(s):  
Md Rashidul Islam ◽  
Man Wang ◽  
Muhammad Zulfiqar
Keyword(s):  
Corporate Governance ◽  
Firm Size ◽  
Significant Influence ◽  
Financial Constraints ◽  
Positive Impact ◽  
Financial Flexibility ◽  
Book Value ◽  
Internal Funds ◽  
Debt Capacity ◽  
The Relationship

Corporate governance has a positive impact on firm performance. Financial flexible firms are a better performer when there are financial constraints as well as financial crises. However, what motivates financial flexibility is a dearth research area in the existing finance literature. The objectives of this research are to investigate the relationship between corporate governance and financial flexibility; how corporate governance influence financial flexibility; and, what factors of corporate governance are dominant to influence financial flexibility. To pursue the research objectives we chose Cement Industry of Bangladesh as a case. We consider liquidity, Internal Funds and Unused debt capacity as the proxy of financial flexibility and Ownership Concentration, Board Size, Board Independence as Corporate Governance variables and Firm Size, Market to Book Ratio, Debt Capacity, Financial Constraints and Firm Age as control variable to estimate the relationship between corporate governance and financial flexibility. This study evidences that Board Structure has no significant influence on firms’ cash holding(Liquidity).However, Firms Age and Market to Book Value have a significant influence on firms' cash position. This study also finds that Ownership Structure has no positive impact on Firms' Unused Debt Capacity but Financial Constraints and Market to Book Value have a positive significant impact on firms' unused debt capacity. However, Firm Size has a positive relationship with Internal Funds.

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