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Article
Publication date: 17 October 2008

Jiatao Li and J. Richard Harrison

The purpose of this paper is to show that corporate governance structures differ significantly across countries. Using agency theory and institutional theory, it examines

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Abstract

Purpose

The purpose of this paper is to show that corporate governance structures differ significantly across countries. Using agency theory and institutional theory, it examines how ownership structure and national culture influence the size and leadership structure of the corporate boards of multinational firms based in industrial countries.

Design/methodology/approach

The hypotheses are tested with data on 399 multinational manufacturing firms based in 15 industrial countries. The authors use ownership concentration, bank control, and state ownership to represent ownership structure. They view institutional structural norms as components of national culture and infer the nature of these norms for governance structure from Hofstede's national culture dimensions.

Findings

The findings show that national culture has a dominant influence on corporate governance structure, and its emphasis is recommended in future cross‐national organizational research.

Research limitations/implications

Although the models were successful in explaining MNC board structure, the authors addressed only the effects of ownership structure and national culture. It is expected that these models could be improved by including national political and legal differences and additional national economic variables.

Practical implications

The findings demonstrate that national cultures of the home countries of MNCs have powerful influences on their governance structures.

Originality/value

This paper links national culture with governance structure.

Details

Corporate Governance: The international journal of business in society, vol. 8 no. 5
Type: Research Article
ISSN: 1472-0701

Keywords

Article
Publication date: 9 March 2015

Patience Aseweh Abor

– The purpose of this study is to examine the effects of health-care governance and ownership structure on the performance of hospitals in Ghana.

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Abstract

Purpose

The purpose of this study is to examine the effects of health-care governance and ownership structure on the performance of hospitals in Ghana.

Design/methodology/approach

The study uses multiple regression models based on a sample of 132 hospitals in Ghana.

Findings

The results of the study indicate that hospitals with a governing board perform better than those without a governing board. The results of this study also suggest that board characteristics and ownership structure are important in explaining the performance of hospitals in Ghana. The results further indicate that mission-based and private hospitals with effective board governance structures exhibit better performance than public hospitals.

Originality/value

This study makes a number of new and meaningful contributions to the extant literature and the findings support managerialism, stakeholder and resource dependency theories. The findings also have important implications for the effective governance of hospitals.

Details

International Journal of Law and Management, vol. 57 no. 2
Type: Research Article
ISSN: 1754-243X

Keywords

Article
Publication date: 28 September 2012

Jaana Lappalainen and Mervi Niskanen

The purpose of this paper is to investigate the impact that ownership structure and board composition have on financial performance in a sample of Finnish small to…

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Abstract

Purpose

The purpose of this paper is to investigate the impact that ownership structure and board composition have on financial performance in a sample of Finnish small to medium‐sized enterprises (SMEs).

Design/methodology/approach

The data for this study were collected through a private survey. The financial data were collected from the Voitto+ register and observations were made from 2000 to 2005. The authors employ panel data estimation and 2SLS methods in their analyses.

Findings

Results suggest that the ownership structure affects both the growth and the profitability of small private firms. Firms with high managerial ownership levels exhibit higher profitability ratios but have lower growth rates. Firms with high venture capital firm ownership ratios are found to grow faster and are less profitable. The results on board structure suggest that board structure has little impact on the performance of small firms. The only significant result in this context is that firms with outside board members have lower growth rates and are less profitable.

Practical implications

The results of this study can be interpreted to indicate that owner‐managers are risk averse and that venture capital firms seek investments with high growth potential. The results could also imply that outsiders are taken on as board members in badly‐performing firms on financiers' requests, or because it is thought that they can enhance performance.

Originality/value

The paper is one of the few that shed light on how corporate governance and ownership structures affect the performance of small private firms.

Article
Publication date: 2 September 2020

I. Wayan Widnyana, I. Gusti Bagus Wiksuana, Luh Gede Sri Artini and Ida Bagus Panji Sedana

This study aims to analyze and explain the effect of financial architecture (with three dimensions: ownership structure, capital structure and corporate governance) and…

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Abstract

Purpose

This study aims to analyze and explain the effect of financial architecture (with three dimensions: ownership structure, capital structure and corporate governance) and intangible assets on performance financial and corporate value in the Indonesian capital market.

Design/methodology/approach

This research was conducted on nonfinancial sector companies that were registered in the Indonesian capital market, namely Indonesia Stock Exchange (IDX) in 2015. This study used quantitative data and used secondary data sources, meaning that data were obtained, collected and processed from other parties. In this study, the hypothesis testing of the effect of financial architecture (included the dimensions of ownership structure, capital structure and corporate governance) and intangible assets on financial performance and corporate value using path analysis was performed.

Findings

The results of this study have provided findings that follow the research model that has been built (1) This research has been able to provide a theoretical model of the influence of financial architecture (with dimensions of ownership structure, capital structure and corporate governance), intangible assets, board processes on financial performance and company value in the Indonesian capital market. (2) To develop a theoretical model about the effect of corporate governance on financial performance in accordance with the two-tier system adopted by Indonesia. (3) An empirical study of the concept of financial architecture put forward by Myers (1999).

Originality/value

This research update lies in the research variable, which determines one value of the financial architecture variable comprehensively, combines the financial architecture variable and intangible assets to then be tested for its effect on company value and the use of the financial process variable as a board process as an intervening variable.

Details

International Journal of Productivity and Performance Management, vol. 70 no. 7
Type: Research Article
ISSN: 1741-0401

Keywords

Article
Publication date: 2 July 2020

Mohammad A.A Zaid, Man Wang, Sara T.F. Abuhijleh, Ayman Issa, Mohammed W.A. Saleh and Farman Ali

Motivated by the agency theory, this study aims to empirically examine the nexus between board attributes and a firm’s financing decisions of non-financial listed firms in…

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Abstract

Purpose

Motivated by the agency theory, this study aims to empirically examine the nexus between board attributes and a firm’s financing decisions of non-financial listed firms in Palestine and how the previous relationship is moderated and shaped by the level of gender diversity.

Design/methodology/approach

Multiple regression analysis on a panel data was used. Further, we applied three different approaches of static panel data “pooled OLS, fixed effect and random effect.” Fixed-effects estimator was selected as the optimal and most appropriate model. In addition, to control for the potential endogeneity problem and to profoundly analyze the study data, the authors perform the one-step system generalized method of moments (GMM) estimator. Dynamic panel GMM specification was superior in generating robust findings.

Findings

The findings clearly unveil that all explanatory variables in the study model have a significant influence on the firm’s financing decisions. Moreover, the results report that the impact of board size and board independence are more positive under conditions of a high level of gender diversity, whereas the influence of CEO duality on the firm’s leverage level turned from negative to positive. In a nutshell, gender diversity moderates the effect of board structure on a firm’s financing decisions.

Research limitations/implications

This study was restricted to one institutional context (Palestine); therefore, the results reflect the attributes of the Palestinian business environment. In this vein, it is possible to generate different findings in other countries, particularly in developed markets.

Practical implications

The findings of this study can draw responsible parties and policymakers’ attention in developing countries to introduce and contextualize new mechanisms that can lead to better monitoring process and help firms in attracting better resources and establishing an optimal capital structure. For instance, entities should mandate a minimum quota for the proportion of women incorporation in boardrooms.

Originality/value

This study provides empirical evidence on the moderating role of gender diversity on the effect of board structure on firm’s financing decisions, something that was predominantly neglected by the earlier studies and has not yet examined by ancestors. Thereby, to protrude nuanced understanding of this novel and unprecedented idea, this study thoroughly bridges this research gap and contributes practically and theoretically to the existing corporate governance–capital structure literature.

Details

Corporate Governance: The International Journal of Business in Society, vol. 20 no. 5
Type: Research Article
ISSN: 1472-0701

Keywords

Article
Publication date: 1 July 2014

Waleed Omri, Audrey Becuwe and Jean-Charles Mathe

The purpose of this paper is to expand understanding of the determinants of adoption innovation in SME context by empirically examining the effect of corporate governance…

Abstract

Purpose

The purpose of this paper is to expand understanding of the determinants of adoption innovation in SME context by empirically examining the effect of corporate governance structure on manager's innovative behavior. This was done through exploring whether ownership structure affects managers’ innovative behavior and if so, whether the effect is mediated by board composition.

Design/methodology/approach

Using a sample of 197 managers within Tunisian SMEs, hypotheses were tested through structural equation modeling and especially using covariance structure analysis (or LISREL method) with Analysis of Moment Structures (AMOS) 18.0 software and maximum likelihood estimation method.

Findings

The paper found that ownership structure is significantly associated with manager's innovative behavior. Further analysis arising from introducing outsiders’ representation on the board as a mediating variable reveals that the relationship is fully mediated by this variable.

Practical implications

This study gives insights to policy makers who are interested in improving board efficacy in emerging economies such as Tunisia. Indeed, the study results should encourage nominating committees and seniors to reflect warily on an effective structuring of board composition by ensuring a certain priority for innovation activities in the firm.

Originality/value

This paper extends the understanding of how ownership structure shapes strategic decisions such as innovation in emerging markets. In addition, it fills the literature void by introducing the board composition as a mediating concept between ownership structure and innovative behavior, which was neglected by previous researchers.

Details

Journal of Accounting in Emerging Economies, vol. 4 no. 2
Type: Research Article
ISSN: 2042-1168

Keywords

Article
Publication date: 19 September 2016

Daniel Kipkirong Tarus and Ezekiel Ayabei

The purpose of this study is to examine the effect of board composition on capital structure of a firm.

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Abstract

Purpose

The purpose of this study is to examine the effect of board composition on capital structure of a firm.

Design/methodology/approach

The paper uses data from firms listed in Nairobi Securities Exchange covering the period 2004-2012. Fixed effect regression model was estimated to test the effect of board composition on capital structure and how chief executive officer (CEO) tenure moderates the relationship.

Findings

The paper finds that board composition has important implications on capital structure decisions. Specifically, director independence is positively related to leverage, whereas CEO duality and tenure have negative and significant effect on leverage. In addition, the interaction effect of CEO tenure indicates that when CEOs have long tenure, the power of independent directors to influence capital structure decisions diminishes. Further, the study found that under long CEO tenure, long-tenure boards use less leverage in their capital structure. As expected, dual CEO with long tenure uses less leverage.

Originality/value

The study uses data from an emerging market, contrary to previous studies using data from developed markets, to test the relationship between board composition and leverage. Second, the paper tests the moderating effect of CEO tenure on board composition – leverage relationship based on the idea that entrenched CEO may influence the decision-making ability of directors, particularly capital structure decisions.

Details

Management Research Review, vol. 39 no. 9
Type: Research Article
ISSN: 2040-8269

Keywords

Abstract

Details

Monetary Policy, Islamic Finance, and Islamic Corporate Governance: An International Overview
Type: Book
ISBN: 978-1-80043-786-9

Abstract

Details

Governance-Led Corporate Performance: Theory and Practice
Type: Book
ISBN: 978-1-78973-847-6

Article
Publication date: 30 March 2022

Sitara Karim, Muhammad Abubakr Naeem and Rusmawati Binti Ismail

This study serves two objectives; first, it examined the impact of ownership structure and board characteristics on firm value; second, the moderating effects of board

Abstract

Purpose

This study serves two objectives; first, it examined the impact of ownership structure and board characteristics on firm value; second, the moderating effects of board gender diversity (women appearance on board) and board ethnic diversity (Chinese, Indian, and Foreign ethnicities) have been examined on the relationship between ownership structure, board characteristics, and firm value.

Design/methodology/approach

The dynamic model, system generalized method of moments (S-GMM hereafter), is employed to control potential dynamic endogeneity, reverse causality, simultaneity and unobserved heterogeneity persistent in corporate governance-performance relationships during 2006–2017 of 483 Malaysian listed companies.

Findings

Findings pertaining to objective one reveal that there is a weak linkage between ownership structure and firm value, whereas board characteristics significantly affect firm performance based on resource dependence theory. While considering the results of objective two, there is mixed evidence of moderating impact of board gender and ethnic diversity on ownership structure, board characteristics and performance nexus.

Practical implications

The findings of the study are practically significant for regulatory bodies, namely, Bursa Malaysia, Securities Commission (SC) Malaysia, and policymakers to develop guidelines for ownership structure variables. Moreover, Malaysian firms need to disperse their concentrated ownership structure for enhanced firm value. In addition, board characteristics significantly affect firm performance in Malaysian listed companies.

Originality/value

The paper contributes to multiple aspects: first, it examined the impact of ownership structure and board characteristics on firm performance. Second, the moderating effect of board gender and board ethnic diversity contributes to research significant and valuable for the researchers and practitioners. Finally, the study employed S-GMM, controlling for dynamic endogeneity considered a main econometric problem for CG-performance relationships.

Details

International Journal of Emerging Markets, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1746-8809

Keywords

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