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This study examines the influence of stock liquidity on stock price crash risk and the moderating role of institutional blockholders in Vietnam’s stock market.

Crash risk is measured by the negative coefficient of skewness of firm-specific weekly returns (NCSKEW) and the down-to-up volatility of firm-specific weekly stock returns (DUVOL). Liquidity is measured by adjusted Amihud illiquidity. The two-stage least squares method is used to address endogeneity issues.

Using firm-level data from Vietnam, we find that crash risk increases with stock liquidity. The relationship is stronger in firms owned by institutional blockholders. Moreover, intensive selling by institutional blockholders in the future will positively moderate the relationship between liquidity and crash risk.

Since stock liquidity could exacerbate crash risk through institutional blockholder trading, firm managers should avoid bad news accumulation and practice timely information disclosures. Investors should be mindful of the risk associated with liquidity and blockholder trading.

We contribute to the literature by showing that the activities of blockholders could partly explain the relationship between liquidity and crash risk. High liquidity encourages blockholders to exit upon receiving private bad news.

Bank creditworthiness refers to the evaluation of a bank’s ability to meet its financial obligations. It is an assessment of the bank’s financial health, stability and capacity to manage risks. This paper aims to investigate the credit rating patterns that are crucial for assessing creditworthiness of the Islamic banks, thereby evaluating the stability of their industry.

Three distinct machine learning algorithms are exploited and evaluated for the desired objective. This research initially uses the decision tree machine learning algorithm as a base learner conducting an in-depth comparison with the ensemble decision tree and Random Forest. Subsequently, the Apriori algorithm is deployed to uncover the most significant attributes impacting a bank’s credit rating. To appraise the previously elucidated models, a ten-fold cross-validation method is applied. This method involves segmenting the data sets into ten folds, with nine used for training and one for testing alternatively ten times changeable. This approach aims to mitigate any potential biases that could arise during the learning and training phases. Following this process, the accuracy is assessed and depicted in a confusion matrix as outlined in the methodology section.

The findings of this investigation reveal that the Random Forest machine learning algorithm superperforms others, achieving an impressive 90.5% accuracy in predicting credit ratings. Notably, our research sheds light on the significance of the loan-to-deposit ratio as a primary attribute affecting credit rating predictions. Moreover, this study uncovers additional pivotal banking features that intensely impact the measurements under study. This paper’s findings provide evidence that the loan-to-deposit ratio looks to be the purest bank attribute that affects credit rating prediction. In addition, deposit-to-assets ratio and profit sharing investment account ratio criteria are found to be effective in credit rating prediction and the ownership structure criterion came to be viewed as one of the essential bank attributes in credit rating prediction.

These findings contribute significant evidence to the understanding of attributes that strongly influence credit rating predictions within the banking sector. This study uniquely contributes by uncovering patterns that have not been previously documented in the literature, broadening our understanding in this field.

The determinants that contribute to reducing stock price crash risk have garnered attention from scholars and practitioners. However, our understanding of the relationship between board diversity and stock crash risk, as well as the contextual factors that influence this relationship, remains limited. To address this gap, this study aims to investigate how different attributes of board diversity affect stock price crash risk, particularly under conditions of higher performance hazard and ownership concentration.

Using a two-stage least squares fixed-effects estimator, the authors analyze a panel data set of 1,792 firm-year observations across 282 firms listed on the KOSPI200 from 2010 to 2019.

Relation-oriented diversity reduces future stock price crash risk, particularly when firms experience performance shortfalls and have concentrated ownership structures, but task-oriented diversity has no significant effects. The results imply that only relation-oriented diversity strengthens governance mechanisms by curtailing managerial bad news withholding behaviors, and the role of relation-oriented diversity in reducing stock crash risk becomes more crucial when firms have higher performance hazard and concentrated ownership.

This study makes crucial contributions as follows: the authors contribute to the stock crash risk literature by shifting the focus from how to when board diversity matters in assessing stock crash risk; the authors extend the board diversity research and enhance scholarly understanding of the effects of board diversity on corporate governance by highlighting that not all aspects of board diversity improve firm governance mechanisms; and the authors widen the lens from a single attribute to multiple attributes of diversity to reveal the effects of diversity on boards in assessing future crash risk.

Much prior work involving director incentives and corporate behaviour has been focussing on their absolute dollar value or the intrinsic value and generated mixed findings. Comparison theories, however, suggest that the relative value of an incentive may be the main drive for individual performance. This study attempts to investigate the role of director relative pay in promoting the board’s intervention with unrelated diversification decisions.

The analysis uses data from firms operating in more than one segment during the period from 1999 to 2019. Data were obtained from WRDS databases. Ordinary least squares (OLS) regression analysis and the two-stage system generalized method of moments (GMM) were run to test the hypotheses. To test the robustness of the findings, alternative proxies for the key independent variables were used in separate analyses.

The results support the hypothesis that unrelated diversification negatively impact firm performance, while higher director relative pay will help reduce unrelated business diversification. The absolute director pay, however, has no significant impact on corporate strategic choices. The results also highlight the moderating effect of director overcompensation. Director overcompensation will cancel out the impact of relative director pay on unrelated diversification.

This study takes a fresh theoretical perspective by framing the investigation using the dimensional comparison theory to address the single untended comparison framework in the director pay structure – the intra-individual framework. It is the first to investigate the role of director relative pay in corporate strategic choices. The findings support the contention that the relative value of the incentive is an important indicator of the effectiveness of the pay.

This study compares the motives of holding cash between developed (Australian) and developing (Malaysian) financial markets.

For the period 2006–2020, the t-test, fixed-effect and generalised method of moment (GMM) model have been applied to a sample of 1878 (1,165 Australian and 713 Malaysian) firms.

The empirical results reveal that firms in developed financial markets hold higher cash compared to the developing financial markets. The findings confirm that motives to hold cash differ between developed and developing financial markets. The GMM findings further show that cash holdings (CH) in Australia are higher due to higher ratios of cash flow, research and development (R&D) and return on assets (ROA), and lower due to larger dividend payments. In the Malaysian market, however, cash flows and R&D are ineffectual, ROA falls and dividend payments rise CH.

The study helps managers, practitioners and investors understand that firms' distinct economic, institutional, accounting and financial environments are important. To attain the desired outcomes, they must thus comprehend and consider these considerations while developing suitable liquidity strategies.

To the authors' best knowledge, this is the initial research demonstrating how varied cash motives and their ramifications are in developed and developing financial markets. Therefore, this study identifies the importance that CH motives varied among financial markets and that findings from a particular market cannot be generalised to other markets because of the market and financial structural variations.

This paper aims to review empirical research on the relationship between institutional ownership (IO) and board governance (85 studies).

Based on agency and upper echelons theory, the heterogeneous monitoring function of specific types and the nature of institutional investors on board composition, compensation and chief executive officer (CEO) characteristics will be focused.

The author found that most studies have referred to archival studies, analyzed the impact of board governance on IO, focused on CEO characteristics, neglected IO heterogeneity and advanced regression models to address endogeneity concerns. In line with the theoretical framework, the relationship between total IO and board governance is heterogeneous. However, specific types such as foreign, dedicated and pressure-resistant institutions represent active monitoring tools and push for increased board governance.

The author provided useful recommendations for future research from a content and methodological perspective, e.g. the need for analyzing the impact of IO on sustainable board governance and other characteristics of top management team members, e.g. the chief financial officer.

As many regulatory bodies implemented regulations to promote shareholder rights and board governance, this literature review highlights the connections of both corporate governance mechanisms. Managers should conduct a careful and timely investor analysis and change the composition and compensation of the board of directors in line with institutional investors’ preferences.

This analysis makes useful contributions to prior research by focusing on IO and board governance, whereas the author structured the heterogeneous variables and results within the structured literature review. The authors guides researchers, regulatory bodies and business practice in this corporate governance topic.

This paper aims to examine the influence of the International Financial Reporting Standards (IFRS) adoption on corporate tax avoidance (CTA). In addition, this study aims to explore whether family ownership moderates the impact of IFRS adoption on CTA.

The authors used a sample of 1,856 firms from various countries around the world, covering the period between 2010 and 2022. To estimate the proposed econometric models, the authors applied both fixed and random effects regression methods.

The present findings show that IFRS adoption has a negative impact on CTA, as measured by the effective tax rate and book-tax differences. This negative impact is more pronounced in “common law” countries than in “civil law countries.” Additionally, the authors found that family ownership plays a moderating role by positively affecting the impact of IFRS adoption on CTA.

The findings have practical, regulatory and academic implications for fostering accountability and fairness in taxation. This study suggests that implementing IFRS reduces tax avoidance and emphasizes the need for firms to evaluate the implications of IFRS adoption on their tax-planning strategies. It highlights the importance of aligning financial reporting practices with international standards to enhance transparency and minimize tax avoidance opportunities. The differential impact of IFRS adoption between “common law” and “civil law” countries underscores the role of legal and regulatory frameworks. In addition, family ownership plays a significant role in shaping tax-planning strategies. From an academic perspective, this research provides a foundation for further exploration into the relationship between IFRS adoption and tax avoidance.

The existing literature has predominantly concentrated on examining the effect of IFRS adoption on CTA, and the empirical findings have been inconsistent. This study introduces a novel perspective by considering the moderating influence of family ownership in determining the impact of IFRS adoption on CTA.

Drawing upon a political economy approach, this article aims to analyze the transformations in the labor market within the context of contemporary capitalism, focusing on the phenomenon of financialization.

Financialization is defined as a distinct wealth pattern marked by a growing proportion of financial assets in capitalist wealth. Within financial markets, corporate performance is continuously assessed, in a process that disciplines management to achieve expected financial results, with consequences throughout corporate management.

We find that this phenomenon has implications for labor management, resulting in the intensification of labor processes and the adoption of insecure forms of employment, leading to the fractalization of work. These two mechanisms, added to the indebtedness of workers, constitute three elements for disciplining labor in contemporary capitalism.

We argue that these forms of discipline constitute a subsumption of labor to finance, resulting in an increase in labor exploitation. This formulation of the relationship between financialization and changes in the realm of labor also contributes to understanding the unrealizing potential of social free time in contemporary capitalism.

Based on stakeholder, agency and institutional theory, this study aims to examine the role of institutional ownership in the relationship between environmental, social and governance practices and CEO compensation.

Utilizing a fixed-effect panel regression analysis, this research utilized a panel data approach, analyzing data spanning from 2014 to 2021, focusing on US companies listed on the S&P500 stock market index. The dataset encompassed 219 companies, leading to a total of 1,533 observations.

The analysis identified that environmental scores significantly impact CEO equity-linked compensation, unlike social and governance scores. Additionally, it was found that institutional ownership acts as a moderating factor in the relationship between the environmental score and CEO equity-linked compensation, as well as the association between the social score and CEO equity-linked compensation. Interestingly, the direction of these moderating effects varied between the two relationships, suggesting a nuanced role of institutional ownership.

This research makes a unique contribution to the field of corporate governance by exploring the relatively understudied area of institutional ownership's influence on the ESG practices–CEO compensation nexus.

This chapter introduces dividend smoothing, presents theories to explain dividend smoothing behavior, and analyzes how different levels of business environment affect dividend smoothing. First, dividend smoothing describes a mechanism in which a firm is reluctant to reduce dividends and only increases dividends when its earnings increase permanently. In practice, dividend smoothing behavior is found in both developed and developing countries. Firms in developed countries are more likely to smooth dividends than those in developing countries. Second, although Miller and Modigliani (1961) posit that investors are indifferent between stable and unstable dividend payments in a perfect environment, market frictions in the real world make stable and unstable dividends have different effects on firm value. Three common frictions are information asymmetry, agency problem, and investors' demand for income smoothing. Due to information asymmetry between insiders and outsiders, firms tend to smooth their dividends to signal outside investors about their quality. In addition, dividend smoothing may be the substitute for weak corporate governance and/or the outcome of free cash absorption behavior. Besides, dividends are more convenient for investors' consumption; therefore, firms are more likely to smooth dividends in order to satisfy investors' demand for smooth income. Finally, as a special dividend decision, dividend smoothing is also affected by an internal micro (industry) and macro-environment. Dividend smoothing theories are the behind mechanisms to explain these effects.