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Article
Publication date: 5 September 2018

Abdullah S. Karaman, Merve Kilic and Ali Uyar

The purpose of this study is to investigate empirically what affects Global Reporting Initiative (GRI)-based sustainability reporting and its relationship with firm…

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Abstract

Purpose

The purpose of this study is to investigate empirically what affects Global Reporting Initiative (GRI)-based sustainability reporting and its relationship with firm performance in the aviation industry between 2006 and 2015.

Design/methodology/approach

The authors derived data from the GRI Sustainability Disclosure Database and Thomson Reuters EIKON; from the former, they downloaded GRI-based reports, and from the latter, they obtained financial data. The authors performed four-level analysis – report existence, report count, application level of report and firm performance –using various regression models (i.e. logistic regression, Poisson regression, ordered logistic regression and ordinary least squares regression).

Findings

First, the authors based the analysis on the existence of GRI-based sustainability reports, which showed that firm size and leverage are positively associated with sustainability reporting. Contrary to expectations, ownership was negatively associated. Furthermore, free cash flow per share, growth and profitability do not have significant effects on sustainability reporting, in contrast to expectations. Subsequent analysis was based on report count (number of total published reports within the examination period) and application levels of reports. Compared to the preceding analysis, there were no notable surprises. In addition, we found evidence that growth is negatively associated with application levels of reports (partially supported). Thus, report existence, report count and application level results largely confirm each other. Finally, the authors tested the effect of sustainability reporting on firm performance, which did not produce significant results. Thus, in the aviation industry, sustainability reporting does not play a significant role in enhancing firm performance.

Practical implications

First, the findings show that larger and highly leveraged aviation firms can reduce agency and legitimacy costs through sustainability reporting. Surprisingly, the same assumption did not hold for ownership structure as the firms with diffused ownership base tend not to publish sustainability reports. Thus, boards are advised to establish and improve monitoring mechanisms in these types of firms. Second, although the number of aviation companies publishing separate sustainability reports has increased significantly over the years, almost half of the companies are not still producing sustainability reports. Hence, if the aviation industry believes the merits of engaging in sustainability issues and sincerely desires to enhance its sustainability reporting practices, the authors can suggest the following initiatives. Boards might encourage companies to incorporate sustainability issues into company operations by assigning the necessary financial and human resources. The boards might also establish a separate sustainability committee or department, which could focus on sustainability issues and reporting practices. Regulatory bodies could also encourage aviation companies to act in a socially and environmentally responsible manner by proposing legal requirements and providing guidance.

Social implications

Relevant civil organisations and environmental activists might undertake more active roles to enhance awareness of sustainability issues in the aviation industry.

Originality/value

Most of the prior studies did not focus on standalone GRI-based sustainability reports, and they were conducted on limited samples and not the aviation industry in particular. This study aims to fill these gaps empirically by establishing testable hypotheses and attempting to demonstrate the validity of theoretical relationships in a wide range of data and among aviation companies worldwide. In this sense, this study is unique in what it undertakes. This study also tests whether sustainability reporting impacts firm value in the aviation industry which, to the best of the authors’ knowledge, has not been examined in prior studies to this extent.

Details

Sustainability Accounting, Management and Policy Journal, vol. 9 no. 4
Type: Research Article
ISSN: 2040-8021

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Article
Publication date: 15 October 2021

Chaiyuth Padungsaksawasdi, Sirimon Treepongkaruna, Pornsit Jiraporn and Ali Uyar

Exploiting an exogenous regulatory shock and a novel measure of asset redeployability, this paper aims to explore the effect of independent directors on asset…

Abstract

Purpose

Exploiting an exogenous regulatory shock and a novel measure of asset redeployability, this paper aims to explore the effect of independent directors on asset redeployability. In particular, the authors use an innovative measure of asset redeployability recently developed by Kim and Kung (2016). This novel index has been rapidly adopted in recent literature.

Design/methodology/approach

Relying on a quasi-natural experiment, the authors execute a difference-in-difference analysis based on an exogenous regulatory shock to board independence. To mitigate endogeneity and demonstrate causation, the authors also perform propensity score matching, instrumental-variable analysis and Oster’s (2019) approach for testing coefficient stability.

Findings

The difference-in-difference estimates show that firms forced to raise board independence have significantly fewer redeployable assets after the shock than those not required to change board composition. This is consistent with the managerial myopia hypothesis. Subject to more intense monitoring, managers behave more myopically, focusing more on assets that are currently useful to the firm and less on redeployability in the future.

Originality/value

The study makes key contributions to the literature. First, the study is the first to examine the effect of board governance on asset redeployability. Second, the authors exploit an innovative index of asset redeployability that has been recently constructed in the literature. Third, by using a natural experiment, the results are much more likely to reflect causality than merely an association.

Details

Corporate Governance: The International Journal of Business in Society, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1472-0701

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Article
Publication date: 16 August 2021

Pattanaporn Chatjuthamard, Viput Ongsakul, Pornsit Jiraporn and Ali Uyar

The purpose of this study is to contribute to the debate in the literature about generalist CEOs by exploring the effect of board governance on CEO general managerial…

Abstract

Purpose

The purpose of this study is to contribute to the debate in the literature about generalist CEOs by exploring the effect of board governance on CEO general managerial ability, focusing on one of the most crucial aspects of the board of directors, board size. Prior research shows that smaller boards constitute a more effective governance mechanism and therefore are expected to reduce agency costs.

Design/methodology/approach

The authors estimate the effect of board size on CEO general managerial ability, using a fixed-effects regression analysis, propensity score matching, as well as an instrumental-variable analysis. These techniques mitigate endogeneity greatly and make the results much more likely to show causality.

Findings

The results show that firms with smaller board size are more likely to hire generalist CEOs. Specifically, a decline in board size by one standard deviation raises CEO general managerial ability by 15.62%. A lack of diverse experiences in a small board with fewer directors makes it more necessary to hire a CEO with a broad range of professional experiences. Furthermore, the agency costs associated with generalist CEOs are greatly diminished in firms with a smaller board. Hence, firms with a smaller board are more inclined to hire generalist CEOs.

Originality/value

Although prior research has explored the effects of board size on various corporate outcomes, strategies and policies, this study is the first to investigate the effect of board size on CEO general managerial ability. This study contributes to the literature both in corporate governance and on CEO general managerial ability.

Details

Corporate Governance: The International Journal of Business in Society, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1472-0701

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Article
Publication date: 4 March 2019

Cemil Kuzey, Ali Uyar and Dursun Delen

The paper aims to identify and critically analyze the factors influencing cost system functionality (CSF) using several machine learning techniques including decision…

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451

Abstract

Purpose

The paper aims to identify and critically analyze the factors influencing cost system functionality (CSF) using several machine learning techniques including decision trees, support vector machines and logistic regression.

Design/methodology/approach

The study used a self-administered survey method to collect the necessary data from companies conducting business in Turkey. Several prediction models are developed and tested; a series of sensitivity analyses is performed on the developed prediction models to assess the ranked importance of factors/variables.

Findings

Certain factors/variables influence CSF much more than others. The findings of the study suggest that utilization of management accounting practices require a functional cost system, which is supported by a comprehensive cost data management process (i.e. acquisition, storage and utilization).

Research limitations/implications

The underlying data were collected using a questionnaire survey; thus, it is subjective which reflects the perceptions of the respondents. Ideally, it is expected to reflect the objective of the practices of the firms. Second, the authors have measured CSF it on a “Yes” or “No” basis which does not allow survey respondents reply in between them; thus, it might have limited the choices of the respondents. Third, the Likert scales adopted in the measurement of the other constructs might be limiting the answers of the respondents.

Practical implications

Information technology plays a very important role for the success of CSF practices. That is, successful implementation of a functional cost system relies heavily on a fully integrated information infrastructure capable of constantly feeding CSF with accurate, relevant and timely data.

Originality/value

In addition to providing evidence regarding the factors underlying CSF based on a broad range of industries interesting finding, this study also illustrates the viability of machine learning methods as a research framework to critically analyze domain specific data.

Details

International Journal of Accounting & Information Management, vol. 27 no. 1
Type: Research Article
ISSN: 1834-7649

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Article
Publication date: 5 November 2021

Ali Uyar, Merve Kilic and Cemil Kuzey

Drawing on neo-institutional, stakeholder, social contract and contingency theories, the objective of this study is to examine whether cultural values across countries may…

Abstract

Purpose

Drawing on neo-institutional, stakeholder, social contract and contingency theories, the objective of this study is to examine whether cultural values across countries may influence decisions to assure integrated reports.

Design/methodology/approach

For this purpose, the authors have collected integrated reporting assurance, national culture and firm-specific data from several sources for the years ranging between 2011 and 2016 and have performed pooled and panel logistic regression analyses.

Findings

The authors found that corporations established in countries where the following characteristics prevail have higher tendencies to assure integrated reports: high collectivism among people, low power distance, strong feminine values rather than masculine values, high uncertainty avoidance, pursuance of short-term goals rather than long-term and a low level of indulgence.

Research limitations/implications

The study is not free from limitations. First, the authors were only able to obtain assurance data for the years between 2011 and 2016 since 2011 was the initial year in which integrated reporting was adopted. Second, culture variables used throughout the study remained the same for each year due to the unavailability of differing data. This was noted in prior studies as well; thus, this is not an exception. Third, the assumption that all companies in a country have the same culture score is inherent in the scoring system of countries (Orij, 2010).

Practical implications

Based on the results, the authors drew implications for organizations, policymakers and assurance service providers. Multinational corporations can benefit from the outcome of this study by considering national cultures in formulating their corporate strategies. Finally, assurance service providers can position themselves in the marketplace by the findings of this study.

Originality/value

This paper aims to enhance the comprehension of corporate reporting practices by companies that operate in different countries, with necessarily varying cultural values. To the best knowledge of the authors, no prior study has yet examined the impact of national culture on the assurance of integrated reports.

Details

Management Decision, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 0025-1747

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Article
Publication date: 8 March 2021

Pattanaporn Chatjuthamard, Pornsit Jiraporn, Sang Mook Lee, Ali Uyar and Merve Kilic

Theory suggests that the market for corporate control, which constitutes an important external governance mechanism, may substitute for internal governance. Consistent…

Abstract

Purpose

Theory suggests that the market for corporate control, which constitutes an important external governance mechanism, may substitute for internal governance. Consistent with this notion, using a novel measure of takeover vulnerability primarily based on state legislation, this paper aims to investigate the effect of the takeover market on board characteristics with special emphasis on board gender diversity.

Design/methodology/approach

This paper exploits a novel measure of takeover vulnerability based on state legislation. This novel measure is likely exogenous as the legislation was imposed from outside the firm. By using an exogenous measure, the analysis is less vulnerable to endogeneity and is thus more likely to show a causal effect.

Findings

The results show that a more active takeover market leads to lower board gender diversity. Specifically, a rise in takeover vulnerability by one standard deviation results in a decline in board gender diversity by 10.01%. Moreover, stronger takeover market susceptibility also brings about larger board size and less board independence, corroborating the substitution effect. Additional analysis confirms the results, including propensity score matching, generalized method of moments dynamic panel data analysis and instrumental variable analysis.

Originality/value

The study is the first to explore the effect of the takeover market on board gender diversity. Unlike most of the previous research in this area, which suffers from endogeneity, this paper uses a novel measure of takeover vulnerability that is probably exogenous. The results are thus much more likely to demonstrate causality.

Details

Corporate Governance: The International Journal of Business in Society, vol. 21 no. 5
Type: Research Article
ISSN: 1472-0701

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Article
Publication date: 16 November 2020

Merve Kılıç, Ali Uyar, Cemil Kuzey and Abdullah S. Karaman

The objective of this study is to investigate whether the institutional environment is associated with the adoption of integrated reporting.

Abstract

Purpose

The objective of this study is to investigate whether the institutional environment is associated with the adoption of integrated reporting.

Design/methodology/approach

The sample of the study is based on the firms included in the list of Fortune Global 500. The logistic regression analysis was run to test the proposed hypotheses.

Findings

The findings indicated that the code-law orientation and strength of the institutional quality are significantly associated (i.e. positively and negatively, respectively) with the integrated reporting of Fortune 500 companies. Firms are motivated for more transparency in stakeholder-oriented and weakly regulated contexts. Thus, stakeholder pressure is more influential than shareholder interest in motivating or forcing firms to issue integrated reports. Besides, there appears to be a trade-off between the public sector and the private sector in terms of ensuring an accountable and transparent business environment. If the public sector does not undertake its role in ensuring a transparent business environment, the private sector fills the gap. The results are robust to alternative sampling and methodologies.

Research limitations/implications

This study implied that the stakeholder orientation of countries fosters the transparency and accountability of firms. Corporate behavior is impacted by the institutional strength or weakness of nations. The institutional theory provides an appropriate ground to understand drivers of corporate reporting practices of firms beyond firm-level characteristics.

Practical implications

The adoption of integrated reporting framework by Fortune 500 companies can be leveraged to alleviate concerns about their social and environmental impacts. Policy-makers in the countries which have a weak institutional environment force or encourage their firms to increasingly meet the transparency and accountability demands of society.

Social implications

The research findings might play an encouraging role in that various stakeholders (i.e. customers, public, civil organizations and press) should undertake active roles and responsibilities to encourage firms to behave in socially and environmentally responsible ways.

Originality/value

This study adds to the literature by examining the influence of the institutional environment on the adoption of integrated reporting, using recent international data, and focusing on the largest companies according to the Fortune's annual Global 500 list. This study is one of the first to examine the association between a set of governance characteristics (i.e. board size, board independence and board diversity) and integrated reporting adoption.

Details

Journal of Applied Accounting Research, vol. 22 no. 1
Type: Research Article
ISSN: 0967-5426

Keywords

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Article
Publication date: 7 August 2017

Mirgul Nizaeva and Ali Uyar

The purpose of this paper is to comparatively analyze the corporate governance codes of transition economies, particularly five Eurasian Economic Union (EAEU) members…

Abstract

Purpose

The purpose of this paper is to comparatively analyze the corporate governance codes of transition economies, particularly five Eurasian Economic Union (EAEU) members (i.e. Russia, Belarus, Kazakhstan, Kyrgyzstan and Armenia). Specifically, the convergence or divergence of these countries’ corporate governance codes among themselves as well as relative to the best practices of the UK Corporate Governance Code (UK Code) and the OECD Principles of Corporate Governance are investigated.

Design/methodology/approach

Initially, the existing literature on corporate governance with special focus on transition countries is reviewed. Afterwards, benchmarking the international best practices, based on main chapters and contents, the corporate governance codes of all countries in the sample are analyzed.

Findings

The paper finds that even though some principles of the corporate governance codes of the countries in the sample differ in some aspects, they do converge to some extent. However, high misalignments between the UK Code and the OECD Principles and the codes of selected countries in some aspects were found.

Research limitations/implications

The conclusion and implications of the study characterize the corporate governance of selected developing countries; thus, they might not be generalizable to other countries.

Practical implications

The codes of the countries in the sample should be revised, and more specifications regarding the stakeholder, board structure, its subcommittees, independence, diversity and transparency issues need to be addressed.

Originality/value

The paper comprehensively analyzes the contents of corporate governance codes of transition countries; from both practical and academic point of view, it was important gap that needed to be fulfilled.

Details

Corporate Governance: The International Journal of Business in Society, vol. 17 no. 4
Type: Research Article
ISSN: 1472-0701

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Article
Publication date: 26 May 2020

Ali Uyar, Merve Kılıç and Mehmet Ali Köseoğlu

The objective of this study is to explore the accounting research network among institutions and countries globally and to contribute to the knowledge development in…

Abstract

Purpose

The objective of this study is to explore the accounting research network among institutions and countries globally and to contribute to the knowledge development in accounting discipline across regions with a novel and original approach.

Design/methodology/approach

This study has been conducted by manually collecting data from 10,863 papers published in 22 accounting journals indexed in the Web of Science (WoS) for the period 2000–2016. Analyses and visualizations of collaborative networks across institutions and regions were performed by using network analysis software packages, including Pajek, UCINET 6, NetDraw and VOSviewer.

Findings

The study finds that the most productive five universities are the University of New South Wales, University of Sydney, University of Texas, University of California and University of Manchester worldwide. In accordance with the institution ranking, the five most productive countries in all periods are the USA, the UK, Australia, Spain and Canada. However, in addition to these countries, it is important to note that some European and Asian countries and New Zealand from Oceania are among the most productive countries which host prolific institutions. Furthermore, network indicators show that the UK is the most influential actor in centrality and brokerage within the research network. We should note that Australia is also among the most influential nations with its influential institutions. In all research metrics, the dominance of Anglophone countries (e.g. the USA, the UK and Australia) is observable on which language advantage might play a role since most internationally accredited journals publish scientific articles in English.

Research limitations/implications

The study is bounded with several main limitations. First, due to collecting the data manually, there might be some inherent limitations. Second, the study is constrained by the time frame between 2000 and 2016. The study does not answer why and how questions in investigating research productivity and effectiveness in the network. Our study might inspire new studies to complement ours by considering these constraints.

Practical implications

Our findings indicated the prominent institution-wide and country-wide actors; thus, the results provide a global perspective on the collaboration network. Second, our findings guide job seekers, who are particularly research-oriented, to potential recruiters around the world both at the institution level and country level. Third, the results might play an important role in forming institution-based and country-based research policies. The USA, among others, is a particularly important actor in productivity, whereas the UK, among others, is a remarkable country in centrality and brokerage in the research network. By examining the policies of these two countries, other nations might shape their research strategies, promotion policies and support and reward schemes. Fourth, cross-institution and in particular cross-country collaborations are imperative in the diversity of accounting research as they blend culturally diverse researchers. Fifth, prominent institutions highlighted in this study might be adopted as role models by other institutions in the same country and benefit their expertise in productivity and cooperation by scrutinizing their approaches. Sixth, our findings and metrics might be adopted as benchmarks for institutions and nations for performance evaluation. Considering our 5-year period indicators, institutions can set targets for their improvement and for measuring the progress. We provide other important implications in the conclusion section of the study.

Originality/value

To the best knowledge of the authors, no study yet investigated the collaboration across academic institutions, regions, and countries in accounting discipline to this extent. Therefore, our research provides a significant contribution to the literature by seeking a comprehensive network analysis of authorship patterns from an institutional and geographical perspective. Doing so, we contribute to knowledge development in accounting discipline with institutional and geographical network analyses.

Details

Journal of Applied Accounting Research, vol. 21 no. 3
Type: Research Article
ISSN: 0967-5426

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Article
Publication date: 15 January 2020

Merve Kılıç, Ali Uyar and Cemil Kuzey

The purpose of this paper is to investigate whether the ethics and accountability environment influences the voluntary assurance demand for integrated reports through the…

Abstract

Purpose

The purpose of this paper is to investigate whether the ethics and accountability environment influences the voluntary assurance demand for integrated reports through the lens of institutional theory.

Design/methodology/approach

This study used an international sample of 192 companies that have registered in the International Integrated Reporting Council’s (IIRC) early examples database and that published integrated reports during the years 2011–2016. Binary logistic regression as well as Instrumental Variables (IV) regression with Probit and GMM estimators were employed to test the proposed hypotheses.

Findings

The results confirm that assurance of integrated reports serves as a response to the absence or incompetence of formal and informal institutions that facilitate private contracting. Specifically, the authors found that firms tend to assure their integrated reports in business environments that are characterized by weaker ethical behaviors, less effective boards, poorer auditing and reporting standards, and insufficient protection of the rights of minority shareholders by the legal system.

Research limitations/implications

This study responds to the research calls upon integrated reporting assurance by investigating the underlying drivers of and motives for voluntary assurance on integrated reports.

Practical implications

The findings provide practical implications for firms, regulators and assurance firms. Firms can utilize the results of the study in determining their corporate policies and strategies regarding whether to undertake assurance on integrated reports. Regulators can also consider the results in shaping and improving the institutional ethical and accountability environment of their countries. Further, assurance firms can use these results to help position themselves and guide their market entry decisions.

Originality/value

This study adds to the understanding of institutional factors that impact the assurance of integrated reports which has been rarely examined by prior research. In particular, this is one of the few attempts to examine the link between institutional ethics and accountability environment and the voluntary assurance demand in an international context.

Details

Journal of Applied Accounting Research, vol. 21 no. 1
Type: Research Article
ISSN: 0967-5426

Keywords

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