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Article
Publication date: 7 July 2020

Yi Feng, Abeer Hassan and Ahmed A. Elamer

This paper aims to contribute to the existing capital structure and board structure literature by examining the relationship among corporate governance, ownership structure

Abstract

Purpose

This paper aims to contribute to the existing capital structure and board structure literature by examining the relationship among corporate governance, ownership structure and capital structure.

Design/methodology/approach

The paper uses a panel data of 595 firm-year observations from a unique and comprehensive data set of 119 Chinese real estate listed firms from 2014 to 2018. It uses fixed effect and random effect regression analysis techniques to examine the hypotheses.

Findings

The results show that the board size, ownership concentration and firm size have positive influences on capital structure. State ownership and firm profitability have inverse influences on capital structure.

Research limitations/implications

The findings suggest that better-governed companies in the real estate sector tend to have better capital structure. These findings highlight the unique Chinese context and also offer regulators a strong incentive to pursue corporate governance reforms formally and jointly with the ownership structure. Finally, the results suggest investors the chance to shape detailed expectations about capital structure behavior in China. Future research could investigate capital structure using different arrangement, conducting face-to-face meetings with the firm’s directors and shareholders.

Practical implications

The findings offer support to corporate managers and investors in forming or/and expecting an optimal capital structure and to policymakers and regulators for ratifying laws and developing institutional support to improve the effectiveness of corporate governance mechanisms.

Originality/value

This paper extends, as well as contributes to the current capital structure and corporate governance literature, by proposing new evidence on the effect of board structure and ownership structure on capital structure. The results will help policymakers in different countries in estimating the sufficiency of the available corporate governance reforms to improve capital structure management.

Details

International Journal of Accounting & Information Management, vol. 28 no. 4
Type: Research Article
ISSN: 1834-7649

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Article
Publication date: 3 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…

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. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1741-0401

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Article
Publication date: 28 August 2019

Sri Mangesti Rahayu, Suhadak and Muhammad Saifi

The purpose of this paper is to investigate the reciprocal relationship between profitability and capital structure and its impacts on the corporate values of…

Abstract

Purpose

The purpose of this paper is to investigate the reciprocal relationship between profitability and capital structure and its impacts on the corporate values of manufacturing companies in Indonesia.

Design/methodology/approach

This research is a quantitative research using the general structural component analysis as the analysis tool. This research involved a number of manufacturing companies registered in the Indonesia Stock Exchange in 2008‒2015 period.

Findings

Profitability has a negative significant influence on capital structure, indicating that profitability is a determining factor upon the corporate capital structure. This finding also implies that the improvement in profitability in the forms of return on investment, return on equity and net profit margin triggers decrease in the proportion of debt within the capital structures of manufacturing companies registered in BEI or Indonesia Stock Exchange.

Originality/value

Previous research only addressed the one-way correlation between profitability and capital structure, whereas this research measured the two-way correlation and reciprocal relationship at the same time. This research measured the influences of profitability and capital structure on the corporate value, in order to find a consistent finding that has not been yet obtained in previous research. This research also attempted to find out whether the use of the same variables within different time and setting (in Indonesia) leads to different results. The inconsistent findings also motivate the researcher to re-explore the reciprocal influence of corporate profitability on corporate capital structure and its effect toward the corporate value.

Details

International Journal of Productivity and Performance Management, vol. 69 no. 2
Type: Research Article
ISSN: 1741-0401

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Article
Publication date: 1 July 2003

Frank Körver and Betteke van Ruler

Organisations differ in the ways that they organise their communication disciplines. Contemporary literature features contributions from a number of noted authors, all…

Abstract

Organisations differ in the ways that they organise their communication disciplines. Contemporary literature features contributions from a number of noted authors, all focusing on the centralisation of communication. Scant attention, however, is paid to factors that are potentially capable of identifying the differences to be found in practice. This paper describes the results of a qualitative research project involving 16 major companies in the Netherlands. This project was initiated by Bennis Porter Novelli and designed to investigate the influence of corporate identity structure on the organisation’s communication structure. The research clearly shows that organisations with monolithic, branded and endorsed identity structures differ in the way they structure and coordinate their external communication disciplines.

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Article
Publication date: 1 July 2006

Christine Vallaster and Leslie de Chernatony

The paper aims to clarify the relationship between organisational structures and individual brand supporting behaviour. It proposes modelling the social transformation…

Abstract

Purpose

The paper aims to clarify the relationship between organisational structures and individual brand supporting behaviour. It proposes modelling the social transformation process and outlining why and how leadership is important throughout the internal brand building process. The study aims to expand the domain of corporate branding by including a broader range of human resource and leadership‐related aspects than is normally found in the branding literature.

Design/methodology/approach

The paper opted for an exploratory study using the open‐ended approach of grounded theory, including 30 depth interviews and one expert group discussion with employees representing middle and senior management having mainly a marketing and corporate communications background. The data were complemented by documentary analysis, including brand documents, descriptions of internal processes, and copies of employee magazine articles.

Findings

The paper provides empirical insights about how change is brought about during internal brand building. It suggests that successful leaders act as “integrating forces” on two levels: integrating the elements of corporate identity structures, and mediating between the corporate branding structures and the individual.

Research limitations/implications

Because of the chosen research approach, the research results may lack generalisability. Therefore, researchers are encouraged to test the proposed propositions further.

Practical implications

The paper includes implications for the development of a powerful brand image, the development of “brand ambassadors” and for managing the balance between stability and change.

Originality/value

This paper fulfils an identified need to study how brand‐supportive behaviour can be enabled.

Details

European Journal of Marketing, vol. 40 no. 7/8
Type: Research Article
ISSN: 0309-0566

Keywords

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Article
Publication date: 15 January 2018

Baah Aye Kusi, Agyapomaa Gyeke-Dako, Elikplimi Komla Agbloyor and Alexander Bilson Darku

The purpose of this paper is to explore the relationship between corporate governance structures and stakeholder and shareholder value maximization perspectives in 267…

Abstract

Purpose

The purpose of this paper is to explore the relationship between corporate governance structures and stakeholder and shareholder value maximization perspectives in 267 African banks from 2006 to 2011.

Design/methodology/approach

The authors used the Prais–Winsten ordinary least squares and random effect regression models to explore this relationship to ensure consistency and efficiency in results. The data for this study were collected from Bankscope.

Findings

The results of this study show that corporate governance structures such as CEO duality, nonexecutive members and extreme large board size lead to a reduction in both shareholder and stakeholder value maximization. However, audit independence and board size also promote both shareholder and stakeholder value maximization. Although gender diversity promotes profit maximization, it was not significant in any of the models estimated. The results further suggest that the same corporate governance structures promote and detract shareholder and stakeholder value maximization in Africa although the effect of corporate governance structures was weightier on shareholder value maximization confirming the agency theory.

Practical implications

From these findings, bank management must pursue the institution of good corporate governance structures and avoid weak corporate governance structures to promote shareholder and stakeholder value maximization. Also equity holders may have to pay particular attention to corporate governance structures because they benefit the most from the institution of good corporate governance structures.

Originality/value

This study explores and compares how corporate governance structures promote shareholder and stakeholder value maximization separately in African banks. To the best of the authors’ knowledge, this is the first of such studies.

Details

Corporate Governance: The International Journal of Business in Society, vol. 18 no. 2
Type: Research Article
ISSN: 1472-0701

Keywords

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Article
Publication date: 19 June 2007

Maurizio La Rocca

The paper aims to focus on a well‐known topic in the financial literature: the relation between capital structure and firm value. The controversial empirical results on

Abstract

Purpose

The paper aims to focus on a well‐known topic in the financial literature: the relation between capital structure and firm value. The controversial empirical results on this topic can be attributable to a lack of attention to the interaction between capital structure and other corporate governance variables. In fact, capital structure represents a corporate governance device that can preserve corporate governance efficiency and protect its ability to create value.

Design/methodology/approach

The paper, after a synthetic review of the main literature, defines, with a descriptive model, a theoretical approach that can contribute in clearing up the relation between capital structure, corporate governance and value. It provides a research proposition, and some suggestions, that should be applied for future empirical research on this topic while it also promotes a more precise design for empirical analysis.

Findings

The debate on the relation between capital structure and a firm's value needs to take directly into account the role of moderation and/or mediation of the corporate governance. It is necessary to consider the presence of complementarity between capital structure and other corporate governance variables such as: ownership concentration; managerial ownership; the role of the board of directors; and so on.

Research limitations/implications

This paper promotes, as an aim for future research, a verification of the validity of this model through application of the analysis to a wide sample of firms.

Originality/value

The paper tried to suggest how to improve previous controversial analysis on this topic.

Details

Corporate Governance: The international journal of business in society, vol. 7 no. 3
Type: Research Article
ISSN: 1472-0701

Keywords

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Article
Publication date: 1 February 2016

Irina Lock and Peter Seele

This paper aims to study the state of the art of corporate social responsibility (CSR) governance and operational structure within the most sustainable companies to arrive…

Abstract

Purpose

This paper aims to study the state of the art of corporate social responsibility (CSR) governance and operational structure within the most sustainable companies to arrive at a typology of CSR organization. Whether companies consider corporate social responsibility (CSR) a strategic management task is mirrored in the department and governance structure of CSR.

Design/methodology/approach

By conducting a web content analysis, the authors apply a “best practice” approach to examine the vertical and horizontal organization of CSR within the “most sustainable companies worldwide” (Robeco SAM, 2013).

Findings

The results show that most corporations have in place governance structures for CSR that organize it horizontally in stand-alone departments. Three types of CSR organization best practice emerged: the single-headed, two-headed and infused types.

Practical implications

The paper indicates three different ways that companies can organize CSR internally. The authors discuss the feasibility of such organization for large and small companies and their day-to-day business.

Originality/value

The paper addresses the under-researched area of vertical and horizontal CSR organization at the micro level. The authors analyze the state of the art of organizational and governance structures of CSR in the most sustainable companies and deduce three types of CSR governance and operational architecture.

Details

Corporate Governance: The International Journal of Business in Society, vol. 16 no. 1
Type: Research Article
ISSN: 1472-0701

Keywords

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Article
Publication date: 17 October 2008

Uche Nwabueze and Joan Mileski

The purpose of this paper is to address corporate governance structures. Effective corporate governance can lead to managerial excellence but managerial ethical excellence

Abstract

Purpose

The purpose of this paper is to address corporate governance structures. Effective corporate governance can lead to managerial excellence but managerial ethical excellence does not always exist without effective corporate governance. Embedded in both effective corporate governance and managerial excellence is the “rightness of decisions” or the ethical decision making process. This paper analyzes this key process in the case of the failure of Swissair.

Design/methodology/approach

The authors examine the key corporate governance structure through an explanatory case analysis of Swissair. They look at the structure by applying institutional theory rather than agency theory. It is hypothesized that corporate governance structures must comply with the norms generated by various stakeholders as well as economic incentives. No one set of norms may dominate the compliance; otherwise a corporation loses legitimacy and resources. It is contended that this lack of compliance of all stakeholder norms led to the failure of Swissair.

Findings

The authors examined the strategies for governance in Swissair leading up to its failure. Critical examination of the various elements of effective corporate governance results in a model presented here for assimilating appropriate norms of behavior into the corporate decision‐making process. They purport that adoption of the model by corporations will improve decision making leading to improved survival and performance.

Originality/value

The case analysis provides for the development of a model of corporate governance which includes consideration of all facets of society, its stakeholders and the norms the stakeholders generate. It is contended that companies must consider ethical, social and political norms of behavior in corporate governance structures as well as economic concerns.

Details

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

Keywords

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Book part
Publication date: 20 June 2003

Mark Hirschey

During recent years, financial economists have made a significant contribution to the rapid development of a vibrant and growing literature on organization structure and…

Abstract

During recent years, financial economists have made a significant contribution to the rapid development of a vibrant and growing literature on organization structure and corporate governance. In reviewing the development of this literature, it becomes easy to see how the seminal contributions of Ronald Coase (awarded the Nobel Prize in Economics in 1991) have become the cornerstone of a new institutional economics. In particular, researchers following in Coase’s footsteps have clarified the conditions under which voluntary contracts between private agents can resolve a wide variety of so-called “agency problems.” More than just representing an important discovery of the significance of transaction costs and property rights for the institutional structure and functioning of the economy, Coase’s work has become an important foundation for the theory of contracts and for the whole field of “organization economics.”

Details

Advances in Financial Economics
Type: Book
ISBN: 978-1-84950-214-6

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