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Article
Publication date: 26 July 2023

Rayenda Khresna Brahmana and Maria Kontesa

This paper examines the impact of sharia-compliant debt financing on stock price crash risk. Unlike those previous studies that took Sukuk or sharia-compliant firms, this study…

Abstract

Purpose

This paper examines the impact of sharia-compliant debt financing on stock price crash risk. Unlike those previous studies that took Sukuk or sharia-compliant firms, this study tests the impact of the proportion reported sharia-compliant debt financing in the balance sheet on the risk of price crash of a firm.

Design/methodology/approach

Using the data from 2,752 firm-year observations of 344 Malaysian non-financial listed companies from 2012 to 2019, this article used a robust panel data estimation technique for statistical inferences. This study also employs panel GMM and quantile least squares as the robustness check.

Findings

This study established a negative relationship between sharia-compliant debt financing and stock price crash risk. The robustness checks with different estimation techniques confirm the results. It implies that firms with a more significant proportion of Sharia-compliant financing tend to have lower future stock price crash risk.

Practical implications

Consistent with the Islamic finance literature, the present study contributes to the existing literature on Islamic capital markets from the perspective of stock price crash risk because it is vital for risk management and investment decision-making as a measure of tail risk for stocks. The findings of this research will assist investors in developing portfolio strategies that incorporate firms with higher levels of sharia-compliant debt financing in their balance sheets. Additionally, the results of this study suggest that policymakers and regulatory bodies should consider revising their monitoring approaches for publicly listed firms.

Originality/value

This study is interesting and unique, as it is a pioneer in testing the impact of sharia-compliant debt financing on reducing stock price crash risk.

Details

Managerial Finance, vol. 50 no. 3
Type: Research Article
ISSN: 0307-4358

Keywords

Article
Publication date: 17 April 2024

Maria Kontesa, Rayenda Khresna Brahmana and Hui Wei You

The research objective starts from the argument that small-scale multinational corporations’ (SMNCs’) managerial behavior toward auditing decisions is influenced by their personal…

Abstract

Purpose

The research objective starts from the argument that small-scale multinational corporations’ (SMNCs’) managerial behavior toward auditing decisions is influenced by their personal value, especially when the auditing process is not mandatory. This study aims to examine how national culture-religiosity affects that decision. The authors further examine how foreign-owned MNCs might behave differently from local MNCs, although the host country’s cultural-religiosity value might influence that decision.

Design/methodology/approach

This study obtains the data from three sources: Hofstede Framework, Pew Research Center and World Bank Enterprise Survey in cross-sectional mode. The final sample consists of 8,590 SMNCs from 45 countries as the observations. This study uses robust regression analysis to test the effects of culture, religiosity and controlling shareholders on the audited financial statements decision.

Findings

The regression results support the hypothesis, whereas cultural-religiosity values are associated with the audited financial report. The findings confirm stakeholder theory and institutional theory.

Originality/value

This study fills a gap in the literature by providing empirical evidence on the cultural and religiosity effects on the accounting decision of SMNCs. The results can be used as the foundation for future research related to MNCs’ managerial behavior toward accounting policies, especially with the psychosocial factors.

Details

Pacific Accounting Review, vol. 36 no. 2
Type: Research Article
ISSN: 0114-0582

Keywords

Article
Publication date: 7 February 2023

Muhammad Arsalan Hashmi, Urooj Istaqlal and Rayenda Khresna Brahmana

The study analyzes the influence of corporate governance and ownership concentration levels on the cost of equity. Further, the authors extend the literature by investigating the…

Abstract

Purpose

The study analyzes the influence of corporate governance and ownership concentration levels on the cost of equity. Further, the authors extend the literature by investigating the moderating effect of ownership concentration levels (i.e. at 5%, 10% and 20%) on the relationship between corporate governance and the cost of equity.

Design/methodology/approach

The study applies several robust panel regression techniques to a sample of 114 active non-financial companies listed on the Pakistan Stock Exchange from 2011 to 2016. Corporate governance was measured through a unique index comprising 30 governance attributes. The cost of equity was measured through the capital asset pricing model. Further, the authors construct three variables for ownership concentration levels, i.e. at 5%, 10% and 20%. To address the endogeneity problem, the one-lagged variable model and GMM approaches were also applied.

Findings

The results indicate that better corporate governance reduces the cost of equity, while ownership concentration at high thresholds would increase the cost of equity. Further, the authors find that ownership concentration at the 20% threshold moderates the relationship between corporate governance and the cost of equity. Thus, the authors argue that firms can minimize the risk faced by shareholders by implementing substantive corporate governance mechanisms. In addition, effective corporate governance mechanisms at high ownership concentration levels are imperative for managing the cost of equity.

Originality/value

The study reports novel evidence that ownership concentration at a high threshold moderates the effect of corporate governance on the cost of equity.

Details

South Asian Journal of Business Studies, vol. 13 no. 2
Type: Research Article
ISSN: 2398-628X

Keywords

Article
Publication date: 23 July 2024

Rabiu Saminu Jibril

This study aims to examine how women on board influence quality and quantity disclosure of emissions discharge by the listed non-financial firms for the period of six years…

Abstract

Purpose

This study aims to examine how women on board influence quality and quantity disclosure of emissions discharge by the listed non-financial firms for the period of six years (2016–2021), with institutional ownership as a moderator.

Design/methodology/approach

The study obtained data from a sample of 83 listed non-financial firms. A content analysis technique was employed to compute emissions disclosure indexes using Global Reporting Initiatives standards from the sampled firms. Random and fixed effect regression analyses were run for both direct and moderation models. Based on the results of the Hausman tests, random results were adopted and used in examining the relationship.

Findings

The result reveals that women on board are significantly related to emission disclosure. The study also documented that institutional owners have not influenced the relationship between women directors and emissions disclosure.

Practical implications

The study's findings have practical implications for emerging economies, corporations and other business organizations seeking to actively involve the emissions control and reduction issues toward sustainable development goals 5, 7 and 13 in their business models and successfully communicate these efforts to stakeholders.

Social implications

Listed firms in emerging economies would gain sincerity through the women directors’ knowledge, skills, demographics and ethnicity in the society. Therefore, corporate bodies in emerging economies can successfully contribute toward improving the social welfare of various segments of society by controlling current and future climate issues. Additionally, society will surely benefit when firms control the pollution discharges within the community.

Originality/value

This is the first study, to the best of the authors’ knowledge, that provides empirical evidence on the effect of the presence of women on board on emissions disclosure using institutional ownership as a moderator in Nigeria.

Details

International Journal of Disaster Resilience in the Built Environment, vol. 15 no. 4
Type: Research Article
ISSN: 1759-5908

Keywords

Article
Publication date: 31 October 2023

Rabiu Saminu Jibril, Muhammad Aminu Isa, Zaharaddeen Salisu Maigoshi and Kabir Tahir Hamid

This study aims to examine how audit committee (AC) attributes influence quality and quantity disclosure of energy consumed by the listed nonfinancial firms for the period of…

Abstract

Purpose

This study aims to examine how audit committee (AC) attributes influence quality and quantity disclosure of energy consumed by the listed nonfinancial firms for the period of five years (2016–2020). The study aims at providing empirical evidence on how board of director’s independence influences the relationship between AC attributes and firms’ energy in achieving sustainable development goals (SDGs) on world climate policy.

Design/methodology/approach

The study obtained data from a sample of 83 listed nonfinancial firms, content analysis technique was used to compute energy disclosure indexes using global reporting initiative standards, while regression analysis was conducted to test the relationship among research variables.

Findings

The study revealed that AC independence, diversity and meetings were significantly related with energy disclosure. Also, the study found that other variables were insignificantly related with energy disclosure.

Research limitations/implications

The study is constrained for not considering all listed firms in the country. Furthermore, the study considered selected attributes, other important audit-committee size attributes such as audit-committee size, audit-committee size tenure could be study in by the future study.

Practical implications

The study’s findings would have practical implications for corporations and other business organizations seeking to actively involve the energy-related SDGs 7 and 13 in their business models and successfully communicate these efforts to stakeholders.

Originality/value

To the best of author’s knowledge, this is the first study that provides empirical evidence on the effect of AC attributes on the energy disclosure using effect of board independence as moderator in Nigeria.

Details

International Journal of Innovation Science, vol. 16 no. 2
Type: Research Article
ISSN: 1757-2223

Keywords

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