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1 – 10 of 17This chapter investigates whether, and if so, how particular firms in a transition economy are involved in bribery. Built on pressure theories, we explain how the direct effects…
Abstract
This chapter investigates whether, and if so, how particular firms in a transition economy are involved in bribery. Built on pressure theories, we explain how the direct effects of firm characteristics and contextual characteristics determine firm bribery behavior. Entrepreneurs make choices based on perceptions of a specific pressure due to organizational characteristics (internal pressures) or due to context (external pressures). The relationship between firm characteristics, context, and bribery was estimated using unique data from a survey of 606 Vietnamese entrepreneurs. We controlled for various entrepreneurial, organizational, and industrial characteristics. The exploratory findings support firm attributes hypotheses, which is a negative relationship between firm size and bribery and a nonmonotonic U-shaped relationship between firm age and bribery. Besides, the effects of context on bribery are also found. Specifically, the result supports a positive relationship between competition and bribery and a negative relationship between the quality of the government and bribery.
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Vidisha Gunesh Ramlugun and Lesley Stainbank
The aim of this study is to explore how a practice approach can provide an understanding of board diversity practices. Drawing from Schatzki's practice theory, this study…
Abstract
Purpose
The aim of this study is to explore how a practice approach can provide an understanding of board diversity practices. Drawing from Schatzki's practice theory, this study considered how board diversity is practiced from the doings and sayings of directors in Mauritius.
Design/methodology/approach
In this study, in-depth interviews with directors in listed companies from different industrial sectors were used to collect data.
Findings
The authors' findings indicate that a country's board diversity practices are influenced by the country's unique social, economic and cultural environment. Whilst board diversity practices may appear as the practices that are motivated by compliance, a deeper look at the results reveals that the laws governing board diversity are interpreted very subtly in a way that benefits shareholders' self-interest. A low percentage of female directors on boards and some indications of shareholder-driven practices are also found. Whilst the corporate sector acknowledges the advantages of diversity, there are some practices that they are unwilling to abandon, demonstrating the importance of the teleoaffective structures and normativity in determining what really occurs. Members of boards resolving disagreement further demonstrates the teleoaffective structure.
Research limitations/implications
This research would be of interest to researchers because of the research's novel approach in studying board diversity which could be used by other researchers to experiment with a practice approach in exploring corporate governance phenomena in unique settings.
Practical implications
The findings are of relevance to policymakers and regulators who seek to strengthen corporate governance practices in similar settings.
Originality/value
This research contributes to the literature on board diversity by showing that analysing board diversity through a practice approach enables a more comprehensive understanding of practices. The authors' study confirms that practice theory has the potential to re-orient the way board diversity studies are undertaken.
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Wided Bouaine, Karima Alaya and Chokri Slim
The objective of this paper is to study the impact of political connection and governance on credit rating and whether there is a substitution or complementary relationship…
Abstract
Purpose
The objective of this paper is to study the impact of political connection and governance on credit rating and whether there is a substitution or complementary relationship between them.
Design/methodology/approach
In order to achieve the objective, a succession of eight ordered probit regressions has been carried out. Moderating variables between the political connection and governance characteristics were introduced. The whole population is taken as a sample, i.e., 27 Tunisian companies that are evaluated by FITSH NORTH AFRICA agencies over a period of 10 years (2009–2018).
Findings
The outcomes are mixed. They show that the political connection does not always influence credit rating; the size and board independence always improves credit rating; the duality between the functions affects credit rating; whereas the majorities’ proportion does not influence credit rating; and a substitution between the political connection and the governance characteristics is validated.
Research limitations/implications
Like any other research, our results are factors of our measures and variable choice and depends heavily on the how these variables were conceived. Also, although our number of observations responds to the statistical result generalization requirements, our sample remains relatively narrow with 27 companies only.
Practical implications
In practice, the research will allow investors to have a better vision upon the future of their investments based on whether to develop their governance system or promote political networking. It will also prompt lenders to look beyond ratings and consider factors such as political connections to make a rational judgment on their future placements.
Social implications
This study leads us to find various solutions: the establishment of credit agencies that take into consideration all the data of all the operators taken as a whole (bank, leasing company, and factoring). It encourages the reorganization of the Tunisian banking sector through mergers for example.
Originality/value
This study is a pioneer in the credit rating field in Tunisia, where the source of debt financing is the most used by all enterprises across all sectors. This study extends the literature of political connection effectiveness, independent directors, board size, in improving corporate performance and credit rating.
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Nikhil Rastogi and Satish Kumar
The purpose of this paper is to examine the impact of bankruptcy reform in the year 2016 on the relation between leverage and firm performance for Indian firms, separately for…
Abstract
Purpose
The purpose of this paper is to examine the impact of bankruptcy reform in the year 2016 on the relation between leverage and firm performance for Indian firms, separately for business group and standalone firms.
Design/methodology/approach
Fixed effects panel regression is used to understand the role of bankruptcy reform on firm-level data to examine the relationship between leverage and firm performance after controlling for size, growth, age, liquidity and promoter shareholding. The authors also apply the generalized method of moments (GMM) to control for the endogeneity concerns.
Findings
The authors show that the introduction of the insolvency and bankruptcy code (IBC) positively moderates the relation between leverage and firm performance such that the extent of negative relation between leverage and firm performance is less in the post-IBC period. The positive impact of IBC on the relation between leverage and firm performance holds only for firms not affiliated to business groups and for firms with higher debt in their capital structure.
Practical implications
The study’s findings will help the regulators appreciate the effectiveness of bankruptcy reforms resulting from IBC implementation in terms of sound bankruptcy process and leading to safeguard the interests of minority shareholders.
Originality/value
The authors provide the only study to examine the role of bankruptcy law in moderating the relation between leverage and firm performance across a sample of business group and standalone firms.
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Min Ji, Detian Deng and Guangyu Liu
Charitable giving in China has moved from being subjected to government attention and public skepticism to receiving government encouragement and public support. The role played…
Abstract
Purpose
Charitable giving in China has moved from being subjected to government attention and public skepticism to receiving government encouragement and public support. The role played by political connections in philanthropy is indisputable, although very few studies have explored their association from the perspective of the country’s first Charity Law of 2016. This study aims to contribute to the ongoing debate about the 2016 Charity Law and offers an understanding of the future trends in corporate charitable giving.
Design/methodology/approach
Using empirical analysis of data collected from listed companies in China, this study analyzes the impact of political connections on corporate charitable giving before and after the 2016 Charity Law. The study adopts three leading theories from previous research into corporate charitable giving and political connections: corporate social responsibility, resource dependence theory and stakeholder theory. A conceptual framework is outlined, and hypotheses are formulated accordingly.
Findings
The results show that political connections have a substantial positive impact on corporate charitable giving, both before and after the implementation of the 2016 Charity Law, which has significantly promoted and increased the amount and proportion of charitable giving. Although the 2016 Charity Law attempted to weaken the political connections of enterprises, the influence of political connections on corporate charitable giving has proved difficult to diminish or eliminate, as charity is dominated by the state.
Originality/value
This study explores the association between political connections and corporate charitable giving from the perspective of China’s Charity Law of 2016.
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Kai Wang, Massimiliano Matteo Pellegrini, Kunkun Xue, Cizhi Wang and Menghan Peng
Digital technologies over time are becoming increasingly pervasive and relatively affordable, finding a large diffusion in Small and Medium Enterprises (SMEs) also for…
Abstract
Purpose
Digital technologies over time are becoming increasingly pervasive and relatively affordable, finding a large diffusion in Small and Medium Enterprises (SMEs) also for internationalization purposes. However, less is known about the specific mechanisms by which this can be achieved. Specifically, we focus on how SMEs can face the international environment, leveraging digital technologies and thanks to their intellectual capital (IC).
Design/methodology/approach
We analyze the relationship between digital technologies and the internationalization of SMEs, exploring the mediating role of IC in its three dimensions: human, relational and innovation capital, and assessing the possible moderating effects posed by international institutional conditions, specifically the Sino-US trade frictions. The relationships are tested using a sample of companies listed on China’s A-share Growth Enterprise Market (GEM) from 2010 to 2021.
Findings
Digital technologies help to internationalize SMEs. However, this positive relationship is affected (mediated) by the presence of an already consolidated IC. In addition, the institutional conditions of the international market, such as the Sino-US trade friction, moderate the components of IC differently. Specifically, the overall mediating effect of human and relational capital is boosted, while this does not happen for innovation capital.
Originality/value
First, this study contributes to the literature on organizational resilience, especially digital resilience, confirming its validity in the context of internationalization and, in particular, those processes adopted by SMEs. Second, we clarify the mechanisms through which digital technologies exert their impact on the process of internationalization and in particular the prominent necessity of having IC. Third, our conclusions enrich the understanding of how IC components react to turbulence in international markets.
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Jianhui Jian, Haiyan Tian, Dan Hu and Zimeng Tang
With the growing concern of various sectors of society regarding environmental issues and the promotion of sustainable development, green technology innovation is generally…
Abstract
Purpose
With the growing concern of various sectors of society regarding environmental issues and the promotion of sustainable development, green technology innovation is generally considered to be conducive to the long-term development of enterprises. However, because of the existence of agency problems, managers may have shortsighted behaviors. Then how will managers' shortsighted behaviors affect enterprises' green technology innovation?
Design/methodology/approach
This paper uses machine learning-based text analysis methods to construct a manager myopia index based on the data from A-share listed companies on the Shanghai and Shenzhen Stock Exchanges from 2015 to 2020. We examine the impact of manager myopia on green technology innovation in companies.
Findings
Our study finds that manager myopia significantly inhibits green technology innovation in companies. However, when multiple large shareholders coexist and the proportion of institutional investors' holdings is high, it can alleviate the inhibitory effect of manager myopia on green innovation. Heterogeneity tests show that the impact of manager myopia on green technology innovation is relatively significant in non-state-owned and manufacturing companies, as well as in the electricity industry. Robustness tests demonstrate that our conclusions remain valid after using propensity score matching to eliminate endogeneity problems.
Originality/value
From the perspective of corporate governance, this paper incorporates managers' shortsightedness, multiple large shareholders and institutional investors' shareholding ratios into the same logical framework, analyzes their internal mechanisms, helps improve corporate governance, enhances green innovation capabilities and has strong implications for the implementation of national innovation-driven development strategies and the achievement of “carbon peak” and “carbon neutrality” targets.
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Hicham Sbai, Ines Kahloul and Jocelyn Grira
This paper aims to examine the determinants of the dividend distribution policy in a banking setting.
Abstract
Purpose
This paper aims to examine the determinants of the dividend distribution policy in a banking setting.
Design/methodology/approach
Using a sample of 48 Islamic banks and 94 conventional banks from 15 Islamic countries over a period spanning from 2012 to 2019, we document the effect of board gender diversity, executive director profile and governance mechanisms on dividend payment decisions. We also analyze the moderating effect of Islamic banks on the relationship between gender diversity and dividend policy.
Findings
We find new evidence on the role of women directors in determining dividend distribution policy and confirm the risk aversion hypothesis, hence contributing to the ongoing debate on gender diversity literature. Our results show that the moderating role of Islamic banks is effective only for small banks.
Practical implications
Our findings have practical implications for shareholders, managers and financial analysts as they suggest rationalizing dividend distribution strategies.
Originality/value
Our study contributes to the growing body of knowledge on dividend policy, gender diversity and Islamic banks.
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Jinfang Tian, Xiaofan Meng, Lee Li, Wei Cao and Rui Xue
This study aims to investigate how firms of different sizes respond to competitive pressure from peers.
Abstract
Purpose
This study aims to investigate how firms of different sizes respond to competitive pressure from peers.
Design/methodology/approach
This study employs machine learning techniques to measure competitive pressure based on management discussion and analysis (MD&A) documents and then utilises the constructed pressure indicator to explore the relationship between competitive pressure and corporate risk-taking behaviours amongst firms of different sizes.
Findings
We find that firm sizes are positively associated with their risk-taking behaviours when firms respond to competitive pressure. Large firms are inclined to exhibit a high level of risk-taking behaviours, whereas small firms tend to make conservative decisions. Regional growth potential and institutional ownership moderate the relationships.
Originality/value
Utilising text mining techniques, this study constructs a novel quantitative indicator to measure competitive pressure perceived by focal firms and demonstrates the heterogeneous behaviour of firms of different sizes in response to competitive pressure from peers, advancing research on competitive market pressures.
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Ankita Bedi and Balwinder Singh
The purpose of this paper is to seek to shed light on the influence of stakeholder pressure on carbon disclosure in an emerging economy.
Abstract
Purpose
The purpose of this paper is to seek to shed light on the influence of stakeholder pressure on carbon disclosure in an emerging economy.
Design/methodology/approach
The present study is based on Bombay Stock Exchange 100 Indian firms for the period of 5 years from 2016–17 to 2020–21. The association between stakeholder pressure and carbon disclosure, along with certain control variables, has been explored through a regression model.
Findings
The results of the study suggest that stakeholders exert a significant influence on corporate carbon disclosure. Further results confirm that regulatory and customer pressure have the most significant and positive influence, while shareholders and creditors exert a significant and negative influence on carbon disclosure. The study also finds that employee pressure does not have any association with carbon disclosure.
Practical implications
This study adds to the existing literature on climate change, carbon disclosure and stakeholder pressure.
Social implications
The present study provides useful insights to corporate managers and policymakers as the study concludes that stakeholders exert a significant influence on carbon disclosure.
Originality/value
Previous studies examining the stakeholder pressure on carbon disclosure ignored emerging economies, while the present study has considered India, which is a developing as well as an emerging economy. Further, to the best of the authors’ knowledge, the current study is the first of its kind to investigate the stakeholder pressure on carbon disclosure in the Indian context. The present study develops a comprehensive index to measure corporate carbon disclosure.
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