scholarly journals Governance and risk interdependencies among family owned firms

2016 ◽  
Vol 13 (2) ◽  
pp. 390-407 ◽  
Author(s):  
Ramanathan Geeta ◽  
Krishna Prasanna
Keyword(s):  
Corporate Governance ◽  
Risk Taking ◽  
Global Financial Crisis ◽  
Excess Risk ◽  
Board Governance ◽  
Firm Level ◽  
Listed Firms ◽  
Variable Approach ◽  
Corporate Governance Mechanisms ◽  
Governance Practices

The paper examines the role and impact of corporate governance mechanisms upon the operating risks of Indian listed firms. The recent global financial crisis was primarily attributed to excess risk–taking. This turmoil in the financial markets had a widespread effect on all industries and raised pertinent questions on the effectiveness of firm level governance practices. Impact of corporate governance practices, vide a constructed board governance index, has been examined on the risk taking behaviour of firms. Utilising a sample of 377 firms with yearly data for 6 years from 2006 to 2012, 2262 firm year observations have been analysed. Results confirm that firms with good corporate governance practices are effective in constraining excess risk taking. An instrumental variable approach is adopted to control for endogeneity, which also supports and substantiates the results.

scholarly journals Does better corporate governance attract foreign equity ownership? Evidence from Malaysian listed companies

2012 ◽  
Vol 9 (4) ◽  
pp. 118-125
Author(s):  
Yap Voon Choong ◽  
Chan Kok Thim ◽  
John Stanley Murugesu
Keyword(s):  
Corporate Governance ◽  
Agency Cost ◽  
Government Ownership ◽  
Firm Level ◽  
Insider Ownership ◽  
Listed Firms ◽  
Good Corporate Governance ◽  
Corporate Governance Mechanisms ◽  
Governance Practices ◽  
Equity Ownership

This study examines the effect of firm-level corporate governance variables on foreign equity ownership (FEO) in Malaysia. Foreign equity ownership can be an important source of capital for companies to fund their expansion and growth. To attract FEO, good corporate governance practices are vital because these practices are used to reduce or mitigate agency cost. Based on a sample of listed firms on Bursa Malaysia and employing multiple regression analysis, the study finds that a number of corporate governance mechanisms significantly improve the ability of companies to attract foreign equity ownership, especially, Insider Ownership, Government Ownership, Firm Size, Dividend Yield and Tobin’s Q. The results of the study indicate that firm-level efforts for better corporate governance sends positive signals and confidence to foreign investors.

scholarly journals Corporate Governance and Cost of Capital: Evidence from Emerging Market

Risks ◽  
2020 ◽  
Vol 8 (4) ◽  
pp. 104
Author(s):  
Muhammad Yar Khan ◽  
Anam Javeed ◽  
Ly Kim Cuong ◽  
Ha Pham
Keyword(s):  
Corporate Governance ◽  
Lower Cost ◽  
Cost Of Capital ◽  
Emerging Market ◽  
Firm Level ◽  
Listed Firms ◽  
Corporate Failure ◽  
Governance Index ◽  
Governance Practices ◽  
Code Of Corporate Governance

This study used a researcher self-constructed corporate governance index as a proxy to measure the firm-level corporate governance compliance and disclosure with the 2002 Pakistani Code of Corporate Governance, to examine the relationship between corporate governance and cost of capital. We found a negative and significant association between the Pakistani Corporate Governance Index (PCGI) and block ownership with the firm-level cost of capital. On average, better-governed Pakistani listed firms tend to be associated with a lower cost of capital than their poorly governed counterparts are. As an emerging market, good corporate governance practices are mainly related to minimise corporate failure and assist firms in attracting capital at a lower cost.

scholarly journals CEO power and bank risk in the UAE

2020 ◽  
Vol 15 (3) ◽  
pp. 117-128
Author(s):  
Haileslasie Tadele ◽  
Baliira Kalyebara
Keyword(s):  
Corporate Governance ◽  
Risk Taking ◽  
Global Financial Crisis ◽  
Bank Risk ◽  
Islamic Banks ◽  
Ceo Power ◽  
Governance Mechanisms ◽  
Corporate Governance Mechanisms ◽  
Conventional Banks ◽  
The Relationship

The lessons from the 2008 global financial crisis show that excessive risk taking and governance failures contribute to the failure of several banks. As a result, the relationship between corporate governance mechanisms and risk taking has been the subject of many studies. However, extant studies report inconclusive results. Therefore, this study aims to investigate the relationship between CEO power and bank risk in the UAE using data over the period of 2015–2018 and a sample of 19 UAE banks. The study uses a Pearson pairwise correlation to analyze the relationship between CEO power and bank risk. In addition, a two-tailed t-test is used to examine the differences between conventional and Islamic banks in terms of CEO power and risk-taking. The results of the study show that CEO power measured using CEO duality and CEO tenure reduces risk. Furthermore, the paper indicates that larger boards and higher CEO ownership tend to increase risk. The study also reports that conventional banks have higher return variability, larger boards and powerful CEOs than Islamic banks. However, Islamic banks tend to have higher non-performing finances than conventional banks. The study provides important insights on the relationship between CEO power and bank risk and concurs with earlier studies. The findings can be of interest to policy makers and can be used as input data for the development of corporate governance mechanisms. Shareholders can also use the survey results as input when appointing a CEO for their banks.

scholarly journals Does Corporate Governance Have a Say on Dividends in Australian Listed Companies?

2021 ◽  
Vol 15 (4) ◽  
pp. 47-75
Author(s):  
Omar Al Farooque ◽  
Ali Hamid ◽  
Lan Sun
Keyword(s):  
Corporate Governance ◽  
Dividend Policy ◽  
Good Governance ◽  
Empirical Studies ◽  
Managerial Ownership ◽  
Monitoring And Control ◽  
Governance Mechanisms ◽  
Listed Firms ◽  
Corporate Governance Mechanisms ◽  
Governance Practices

This paper investigates whether corporate governance has an impact on dividend policy in Australian listed firms. The empirical studies of corporate governance and dividend policy in the Australian context tend to have a limited scope and the findings are mixed. Unlike the existing literature, this paper provides a more comprehensive examination of the relationship between dividend policy and corporate governance mechanisms. Using a sample of 1,438 firm-year observations for the period of 2005 to 2011 and the panel data approach, this study finds that dividend payout is significantly positively (negatively) correlated with board size, board independence, institutional ownership and use of a Big-4 audit firm (CEO duality and managerial ownership). Moreover, dividend yield is significantly positively (negatively) correlated with managerial ownership (foreign ownership). These findings suggest that dividend policy and corporate governance mechanisms are complementary i.e. firms paying higher dividends are more likely to engage in good governance practices as well as having strong monitoring and control systems in place and therefore both dividend policy and corporate governance are considered as effective tools in reducing agency costs.

scholarly journals Campaign finance and corporate governance: The case of Brazil

2006 ◽  
Vol 3 (2) ◽  
pp. 125-136
Author(s):  
Andre Carvalhal da Silva ◽  
Flavia Mourao Graminho
Keyword(s):  
Corporate Governance ◽  
Campaign Finance ◽  
Political Influence ◽  
Political Campaigns ◽  
Political Contributions ◽  
Firm Level ◽  
Corporate Governance Mechanisms ◽  
Governance Practices ◽  
Ownership Rights ◽  
And Control

Corporate governance mechanisms, such as transparency, accounting standards, responsibility, accountability, fairness, business ethics, efficient shareholder controls, and ownership rights are key tools in combating corruption. This paper investigates on a firm-level basis the relation between corporate governance practices and campaign finance in Brazil. We interpret campaign finance as a proxy for political influence by interest groups. Our results indicate that family-owned firms contribute significantly more for political campaigns, both in terms of proportion of firms and total amount spent to finance the candidates. Higher concentration of capital and the separation of ownership and control are positively related to campaign donations, while better corporate governance is negatively related to political contributions.

DO OWNERSHIP CONCENTRATION AND THE BOARD OF DIRECTORS AFFECT EXPORTS?

2021 ◽  
Vol 22 (3) ◽  
Author(s):  
VITOR F. M. B. DIAS ◽  
MICHELE A. CUNHA ◽  
FERNANDA M. PEIXOTO ◽  
DUTERVAL JESUKA
Keyword(s):  
Corporate Governance ◽  
Good Governance ◽  
Optimal Level ◽  
Board Composition ◽  
Exporting Firms ◽  
Listed Firms ◽  
Corporate Governance Mechanisms ◽  
Dependent Variables ◽  
Governance Practices ◽  
The Board Of Directors

ABSTRACT Purpose: To investigate whether the shareholder concentration and the board composition influence the export of Brazilian listed firms from 2010 to 2017. Originality/value: The study contributes to the literature on exports and corporate governance by highlighting that companies with good governance practices, measured by the board composition and ownership/control structure, might increase their exports. This research can serve as a guide for companies to structure their boards in order to positively influence exports and improve performance. In addition, the study raises the question of what would be the “optimal level” of firms’ shareholding concentration in order to improve the decision-making process involved in choosing to expand borders through export. Design/methodology/approach: The study performed logistic regression (logit model) and regression with the censored dependent variable (tobit model). Propensity to export and intensity of export were used as dependent variables. The logit regressions involved a sample of 307 exporting and non-exporting companies, and the tobit regressions involved a sample of 61 exporting firms. Findings: We found a positive relationship between board independence and exports, that is, the greater presence of independent members on the board, the higher the export level of firms. We also found that there is a non-monotonic relationship between shareholder concentration and level of exports. In summary, the study suggests that some corporate governance mechanisms may act as antecedents for firms’ export practices.

scholarly journals Ownership Reform, State Ownership, Corporate Governance, and Agency Costs: The Case of Chinese Listed Companies

2019 ◽  
Vol 10 (1) ◽  
pp. 91
Author(s):  
Ratnam Vijayakumaran
Keyword(s):  
Corporate Governance ◽  
Agency Costs ◽  
State Ownership ◽  
Governance Mechanisms ◽  
Firm Level ◽  
Listed Firms ◽  
Corporate Governance Mechanisms ◽  
Chinese Listed Companies ◽  
Reform State ◽  
Ownership Reform

The aim of this paper is to examine the effect of 2005-ownership reform and state ownership on the linkages between corporate governance mechanisms and agency costs for Chinese listed firms. Based on a large panel of Chinese listed firms, we find that following the reform managerial ownership, institutional shareholdings and debt financing have emerged as effective governance mechanisms to reduce agency costs only for private-controlled firms in the post reform period. Therefore, our study concludes that the effectiveness of corporate governance mechanisms differ between state and private controlled firms and state ownership still hinders effectiveness of governance mechanisms among Chinese listed firms. This study contributes to the literature on the implications of ownership reform and state ownership for corporate governance and agency costs at the firm level in transition economies.

scholarly journals The relationship between corporate governance mechanisms and the performance of Saudi listed firms

2017 ◽  
Vol 14 (2) ◽  
pp. 338-349 ◽  
Author(s):  
Mamdouh Abdulaziz Saleh Al-Faryan
Keyword(s):  
Corporate Governance ◽  
Saudi Arabia ◽  
Chief Executive Officer ◽  
Empirical Studies ◽  
Chief Executive ◽  
Direct Consequence ◽  
Listed Firms ◽  
Corporate Governance Mechanisms ◽  
Governance Practices ◽  
Code Of Corporate Governance

This paper gauges, both qualitatively and quantitatively, the pertinent variables to corporate governance practices and their relationship to business productivity in the context of the Kingdom of Saudi Arabia. This study was conducted in response to the limited literature in this context. A new code of corporate governance was issued by the Saudi Arabian Capital Market Authority as a direct consequence of the 2006 stock market crash; in 2010, the code was made mandatory for listed firms. Rigorous empirical studies are practical not only for Saudi Arabia and its policy makers but also potentially for solving global investment issues and ensuring security. This study found two variables to have a significant negative relation: chief executive officer turnover and independent board members. Thus, greater rates of chief executive officer turnover are associated with negative firm performance. In addition, independent board directors’ negative value was found to be very close to zero and significant only at the 10% level. Consequently, some caution is required when considering this result.

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

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